July 27, 2011, at 11:33 am
by Greg Hunter in the category USAWatchdog.com |
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by Greg Hunter in the category USAWatchdog.com |
Print This Post | Email This Post
By Greg Hunter’s USAWatchdog.com
Dear CIGAs,
Watching the debt negotiations is like watching two stubborn people headed over a waterfall. Both are too blockheaded to steer the boat towards land on the left or the right. So, both go over the edge and will see how long the other can hold his breath. Both, of course, drown in this story, right along with the rest of the country. Yesterday, Speaker Boehner said he wanted to call the President’s bluff and not give him a “blank check.” The President, on the other hand, has said (many times) he’s going to veto any plan that doesn’t raise the debt ceiling past the 2012 presidential election. I know many think there is going to be a last minute deal before the August 2nd deadline, but I just don’t see it. If the Republican bill from the House makes it past the Democrat-controlled Senate and there is only an increase in the debt ceiling to make it for 6 months or so—veto here we come. Or maybe, there is no bill that can get through Congress, and nothing even makes it to the President’s desk by the August 2nd deadline.
I eventually see a debt deal getting done, but not until after the August 2nd. That’s when the Treasury says it will exhaust its borrowing limit. In this scenario, both parties hope the other side will take it on the chin and be hurt worse in the eyes of voters. I don’t know who will come out on top if this happens, but big time damage to the U.S. economy will be done. Forget about default on the U.S. Treasury debt. That is simply not going to happen, at least not anytime soon. America has the money to pay the interest on its Treasuries. It is the credit rating of the United States that will take a beating. In the latest report from Shadowstats.com, economist John Williams said, “If I were to script a scenario as to how the United States quickly could debase the U.S. dollar with maximum impact, impairing the dollar’s reserve status and dwindling global credibility, and accelerating the movement towards a U.S. hyperinflation, it would be extremely difficult to come up with a more destructive course of action than what already is taking place in Washington, D.C. The chances of a U.S. debt default remain nil, but risk of a U.S. sovereign credit rating downgrade—though small—is increasing. . .”
If the debt of the United States is downgraded, other debt will also be downgraded. As credit ratings go down, interest rates do the opposite. U.S. consumers would start paying more for things like credit cards, mortgages and car loans. Hundreds of municipalities would also pay higher borrowing costs for their debt. These are just a few of the interest rate wild cards. This would put a huge drag on an economy that is already on the skids. The dollar would also take a pounding because nervous investors would start to dump dollars and Treasuries. The Shadowstats.com report goes on to say, “The administration claims the U.S. will default if the debt ceiling is not raised by August 2nd. There are those who suggest there is more time beyond that, if only the government selectively pays its bills, giving priority to interest and debt payments. With other government obligations not paid as due, though, that circumstance likely would trigger the rating downgrades and intensify dollar dumping and abandonment.”
More…
Dear CIGAs,
Watching the debt negotiations is like watching two stubborn people headed over a waterfall. Both are too blockheaded to steer the boat towards land on the left or the right. So, both go over the edge and will see how long the other can hold his breath. Both, of course, drown in this story, right along with the rest of the country. Yesterday, Speaker Boehner said he wanted to call the President’s bluff and not give him a “blank check.” The President, on the other hand, has said (many times) he’s going to veto any plan that doesn’t raise the debt ceiling past the 2012 presidential election. I know many think there is going to be a last minute deal before the August 2nd deadline, but I just don’t see it. If the Republican bill from the House makes it past the Democrat-controlled Senate and there is only an increase in the debt ceiling to make it for 6 months or so—veto here we come. Or maybe, there is no bill that can get through Congress, and nothing even makes it to the President’s desk by the August 2nd deadline.
I eventually see a debt deal getting done, but not until after the August 2nd. That’s when the Treasury says it will exhaust its borrowing limit. In this scenario, both parties hope the other side will take it on the chin and be hurt worse in the eyes of voters. I don’t know who will come out on top if this happens, but big time damage to the U.S. economy will be done. Forget about default on the U.S. Treasury debt. That is simply not going to happen, at least not anytime soon. America has the money to pay the interest on its Treasuries. It is the credit rating of the United States that will take a beating. In the latest report from Shadowstats.com, economist John Williams said, “If I were to script a scenario as to how the United States quickly could debase the U.S. dollar with maximum impact, impairing the dollar’s reserve status and dwindling global credibility, and accelerating the movement towards a U.S. hyperinflation, it would be extremely difficult to come up with a more destructive course of action than what already is taking place in Washington, D.C. The chances of a U.S. debt default remain nil, but risk of a U.S. sovereign credit rating downgrade—though small—is increasing. . .”
If the debt of the United States is downgraded, other debt will also be downgraded. As credit ratings go down, interest rates do the opposite. U.S. consumers would start paying more for things like credit cards, mortgages and car loans. Hundreds of municipalities would also pay higher borrowing costs for their debt. These are just a few of the interest rate wild cards. This would put a huge drag on an economy that is already on the skids. The dollar would also take a pounding because nervous investors would start to dump dollars and Treasuries. The Shadowstats.com report goes on to say, “The administration claims the U.S. will default if the debt ceiling is not raised by August 2nd. There are those who suggest there is more time beyond that, if only the government selectively pays its bills, giving priority to interest and debt payments. With other government obligations not paid as due, though, that circumstance likely would trigger the rating downgrades and intensify dollar dumping and abandonment.”
More…
Beige Book: "Economy Slowed Down In 8 Of 12 Regions", Droughts, Flooding, Japan Blamed
The Fed's most irrelevant report, the Beige Book, is out. Here is the gist- Fed Beige Book Says U.S. Economy Slowed in Eight of 12 Regions
- Droughts, flooding adversely affected seven regions
- Wage pressures ‘subdued,’’ inflation pressures ‘‘weakened”
- Spending in majority of regions saw modest growth of nonauto retail sales
- Inventories still lean due to Japanese supply chain disruptions.
- Manufacturing was steady or slowed in many regions
- Most of residential real estate market still weak
Restructuring of State Debt Is Default
Eric De Groot at Eric De Groot - 4 hours ago
Any restructuring would be considered a default. Yet, the headlines continue
to repeat all-is-well in muni bond land. The human tendency to stand with
the crowd even when it faces obvious danger is strong. Headline: Facing a
Hit Over Debt in Alabama In a move to avoid the largest municipal bankruptcy
in U.S. history, holders of more than $3 billion in debt issued by Jefferson
County, Ala.,...
[[ This is a content summary only. Visit my website for full links, other
content, and more! ]]
Submitted by Tyler Durden on 07/27/2011 - 15:24
Anyone who had hoped that the algobots, so good at creating an almost daily levitation rally, at 3 pm would save the day will have to wait. The volume of today's selliff is starting to provide unmanageable even for the HFT crew to stand against. The 1300 support level in the ES was just taken out. And a quick look at packet churning courtesy of Nanex into the last several minutes shows that we may soon get a perfect storm replica of what happened on May 6: all that needs to happen is for quote stuffing to surge and liquidity to disappear and the pogrom will be complete. At least the fund managers (the same ones who relied on S&P and Moody's for so many years to make their investment decision for them), are once again putting their money into Treasurys. You know, the first security to be impacted when the US defaults...
As
Bloomberg reports, the spread between the July 28 and the August 4
T-Bills, two instruments that mature within a week of each other, and
which differ by absolutely nothing else, has just surged to the widest
ever, as investors are happy to roll away from long maturity instruments
(even if longer maturity in this case means one week down the road)
and dump securities that mature after the debt ceiling deadline for
fear they will not get repaid. As for what is happening with the August
25 Bill, see second chart below. Yes: the market is starting to price
in the unmentionable.
Jeff Clark of Casey Research has created a wonderful historical "art"
album which addresses the number one question which most people living
in the US right now are unable to fathom: how can one's currency go
from X to 0. It is impossible. It certainly can not happen to the
dollar. Right? Well, as Jeff says: "History has a message for us: No fiat currency has lasted forever. Eventually, they all fail. You might suspect this happened only to third world countries. You’d be wrong. There
was no discrimination as to the size or perceived stability of a
nation’s economy; if the leaders abused their currency, the country
paid the price." We may add one other thing: no country in the history of the world has imploded from hyperdeflation. Not one.
At the point where the debt load was insurmountable and not enough
cash flow was being generated to sustain it, the authorities would
always find a way to step in and be the terminal source of dilutive
fiat demand: from ancient Rome, to Weimar, to the collapse of the
Soviet Block, to, inevitably, the unwind of the failed (neo) Keynesian
model, where we are right about now. Sure, we can all come up with
goalseeked theories that validate our perspective but they are all
meaningless at the end. Past a given threshold debt money ceases to
function as backed by the full "faith and credit" of the backstopper
and is nothing but paper. Yes. Even the abstract concept of so-called
"reserve" currencies. Quote Clark: "As you scroll through the
currencies below, you’ll see some long-ago casualties. What’s
shocking, though, is how many have occurred in our lifetime. You might
count how many currencies have failed since you’ve been born." There
are many more where these came from. Thousands in fact. Which brings us
to the title of this post. What are all these images, which is really
all they are now - fancy paperweights (no pun intended) from near and
far history, worth now? Precisely.
Anyone who had hoped that the algobots, so good at creating an almost daily levitation rally, at 3 pm would save the day will have to wait. The volume of today's selliff is starting to provide unmanageable even for the HFT crew to stand against. The 1300 support level in the ES was just taken out. And a quick look at packet churning courtesy of Nanex into the last several minutes shows that we may soon get a perfect storm replica of what happened on May 6: all that needs to happen is for quote stuffing to surge and liquidity to disappear and the pogrom will be complete. At least the fund managers (the same ones who relied on S&P and Moody's for so many years to make their investment decision for them), are once again putting their money into Treasurys. You know, the first security to be impacted when the US defaults...
Spread Between July 28 And August 4 Bills Hits 12 Bps, Widest Ever On Default Risk
Submitted by Tyler Durden on 07/27/2011 - 14:24 Debt Ceiling defaultAs
Bloomberg reports, the spread between the July 28 and the August 4
T-Bills, two instruments that mature within a week of each other, and
which differ by absolutely nothing else, has just surged to the widest
ever, as investors are happy to roll away from long maturity instruments
(even if longer maturity in this case means one week down the road)
and dump securities that mature after the debt ceiling deadline for
fear they will not get repaid. As for what is happening with the August
25 Bill, see second chart below. Yes: the market is starting to price
in the unmentionable.
July 27, 2011, at 7:12 am
by Dan Norcini in the category Trader Dan Norcini | Print This Post | Email This Post
by Dan Norcini in the category Trader Dan Norcini |
Print This Post | Email This Post
Dear CIGAs,
Excuse me for the lack of posts this week thus far but Trader Dan has been staying quite busy of late and has not been able to keep all the plates spinning simultaneously so the posting plate has had to be let down lest the other plates succumb to gravity.
Gold is acting in textbook fashion according to the technical signals thus far. Once it took out the overhead resistance level that the bullion banks were attempting to enforce at the $1610 level, the weaker shorts who were piggybacking the large bears had to beat a hasty retreat and cover. Their buying triggered some of the system trades to send in additional buy orders with the result that prices shot directly to the first resistance level near $1625 before setting back a tad.
I should note that in today’s session (Tuesday), gold dipped back down towards $1610 but found more buying and not liquidation related selling. That seem to catch a lot of traders by surprise with the result that the opportunistic shorts were once again forced to retreat under a withering barrage of buy orders.
This market continues to astound skeptics as it as of yet shows no sign of weakening interest on the buy side. Coming on a day in which option sellers were desperate to keep their cash gravy train from sinking in the river crossing, makes the performance even more the sweeter. Those option writers have skinned so many longs in years past that it is nice to see them get their comeuppance, even if it is only for one day’s option expiration.
I have put up a weekly chart of gold to attempt to show you the channel in which gold is rising, a channel which has very neatly defined both its upper reaches and its downside forays for the better part of 2 1/2 years now. Note carefully that since March of this year, the downside moves have not made it as low as the bottom of the channel. Instead, buyers have come in rather quickly and kept price from testing the lower limits of the channel. This is evidence that the bulls have been in control of this market since that time frame.
Looking back we know the reason for this from a fundamental standpoint as sovereign debt woes began to intensify out of Euro land, inflation reared its ugly head across China and other emerging economic powerhouses in that region and elsewhere and the Federal Reserve telegraphed that the US economy was so weak that monetary policy was going to stay extremely accommodative for the foreseeable future.
What now appears to be happening is that traders and investors are watching the US’ deteriorating fiscal condition and have added that into the mix. Simply put, most want no part of the US Dollar which is paying next to nothing as far as yield goes and is threatening a technical washout to the downside as it inches ever closer to a major chart support level.
The buyers have now taken gold to the top of the innermost channel noted on the price chart. This week that top of the wider channel comes in near $1665 – $1675. There is psychological resistance near the $1650 level, as these increments of $50 are always significant for gold not from a chart level but just from the fact that so many traders look at these round numbers when gauging price performance.
If gold plows through the upper channel anytime within the next few weeks time, it should begin to accelerate at a steeper rate. It will then form another price channel albeit this one will be at a much steeper slope. One thing I would like to point out is that the price channel currently noted on the chart is one that is very modest and orderly; only since March of this year has the rise of gold began to steepen somewhat but even at that, it is a far cry from going vertical. Once gold does go vertical (and it will at some point) then the gains will be remarkable. At that time I expect the long suffering holders of many of the quality mining shares that have been lagging to finally see the rewards of their patience.
From a chart support level, we could conceivably fall as low as $1525 and stay within the steeper channel being formed on the chart but unless we see some rather remarkable turnarounds in the above three factors that have been driving gold of late, I would be very surprised to see the metal move to that level. If it did, one would suspect eager buyers would be quite active, particularly if such an occurrence were to develop during the latter part of the third quarter, since gold will be entering its strongest time of the year from a seasonal perspective.
I would like to make a comment in regards to my good friend Jim Sinclair who caught a fair amount of grief from naysayers and other assorted trolls earlier this year when his gutsy call of $1650 gold did not materialize in January, a call which he made well in advance of 2011. Now that gold is sitting up closer to $1625, a larger number of pundits are now talking about $1650 as a minor stop along the path to considerably higher prices. Nice going Jim – you were a tad early but a prediction that far out ahead of time is still pretty damned good as far as this trader is concerned.
Believe it or not, sometimes a trader or a holder of a particular stock can be absolutely right in their expectations if they have carefully done their homework and have a wealth of experience to back up their conclusions. The problem is that until the rest of the pack actually catches up with you and sees the actual things that you see now, the stock or commodity does not go anywhere. It takes the rest of the herd to come in and reach the conclusion that you have already arrived at to make your investment choice a prosperous one. Their buying then takes the market to new highs or to levels that your analysis suggests it might very well go.
The flip side to this is that you may have found an undiscovered gem out there for an investment but until the rest of the public thinks the same way about that stock or commodity as you do, it ain’t going to go anywhere. Remember that the next time you decide to drop your live’s savings on some obscure stock.
Let’s see how gold closes out this week to decipher where the market is telling us that this thing might want to head next.
Click charts to enlarge in PDF format
Excuse me for the lack of posts this week thus far but Trader Dan has been staying quite busy of late and has not been able to keep all the plates spinning simultaneously so the posting plate has had to be let down lest the other plates succumb to gravity.
Gold is acting in textbook fashion according to the technical signals thus far. Once it took out the overhead resistance level that the bullion banks were attempting to enforce at the $1610 level, the weaker shorts who were piggybacking the large bears had to beat a hasty retreat and cover. Their buying triggered some of the system trades to send in additional buy orders with the result that prices shot directly to the first resistance level near $1625 before setting back a tad.
I should note that in today’s session (Tuesday), gold dipped back down towards $1610 but found more buying and not liquidation related selling. That seem to catch a lot of traders by surprise with the result that the opportunistic shorts were once again forced to retreat under a withering barrage of buy orders.
This market continues to astound skeptics as it as of yet shows no sign of weakening interest on the buy side. Coming on a day in which option sellers were desperate to keep their cash gravy train from sinking in the river crossing, makes the performance even more the sweeter. Those option writers have skinned so many longs in years past that it is nice to see them get their comeuppance, even if it is only for one day’s option expiration.
I have put up a weekly chart of gold to attempt to show you the channel in which gold is rising, a channel which has very neatly defined both its upper reaches and its downside forays for the better part of 2 1/2 years now. Note carefully that since March of this year, the downside moves have not made it as low as the bottom of the channel. Instead, buyers have come in rather quickly and kept price from testing the lower limits of the channel. This is evidence that the bulls have been in control of this market since that time frame.
Looking back we know the reason for this from a fundamental standpoint as sovereign debt woes began to intensify out of Euro land, inflation reared its ugly head across China and other emerging economic powerhouses in that region and elsewhere and the Federal Reserve telegraphed that the US economy was so weak that monetary policy was going to stay extremely accommodative for the foreseeable future.
What now appears to be happening is that traders and investors are watching the US’ deteriorating fiscal condition and have added that into the mix. Simply put, most want no part of the US Dollar which is paying next to nothing as far as yield goes and is threatening a technical washout to the downside as it inches ever closer to a major chart support level.
The buyers have now taken gold to the top of the innermost channel noted on the price chart. This week that top of the wider channel comes in near $1665 – $1675. There is psychological resistance near the $1650 level, as these increments of $50 are always significant for gold not from a chart level but just from the fact that so many traders look at these round numbers when gauging price performance.
If gold plows through the upper channel anytime within the next few weeks time, it should begin to accelerate at a steeper rate. It will then form another price channel albeit this one will be at a much steeper slope. One thing I would like to point out is that the price channel currently noted on the chart is one that is very modest and orderly; only since March of this year has the rise of gold began to steepen somewhat but even at that, it is a far cry from going vertical. Once gold does go vertical (and it will at some point) then the gains will be remarkable. At that time I expect the long suffering holders of many of the quality mining shares that have been lagging to finally see the rewards of their patience.
From a chart support level, we could conceivably fall as low as $1525 and stay within the steeper channel being formed on the chart but unless we see some rather remarkable turnarounds in the above three factors that have been driving gold of late, I would be very surprised to see the metal move to that level. If it did, one would suspect eager buyers would be quite active, particularly if such an occurrence were to develop during the latter part of the third quarter, since gold will be entering its strongest time of the year from a seasonal perspective.
I would like to make a comment in regards to my good friend Jim Sinclair who caught a fair amount of grief from naysayers and other assorted trolls earlier this year when his gutsy call of $1650 gold did not materialize in January, a call which he made well in advance of 2011. Now that gold is sitting up closer to $1625, a larger number of pundits are now talking about $1650 as a minor stop along the path to considerably higher prices. Nice going Jim – you were a tad early but a prediction that far out ahead of time is still pretty damned good as far as this trader is concerned.
Believe it or not, sometimes a trader or a holder of a particular stock can be absolutely right in their expectations if they have carefully done their homework and have a wealth of experience to back up their conclusions. The problem is that until the rest of the pack actually catches up with you and sees the actual things that you see now, the stock or commodity does not go anywhere. It takes the rest of the herd to come in and reach the conclusion that you have already arrived at to make your investment choice a prosperous one. Their buying then takes the market to new highs or to levels that your analysis suggests it might very well go.
The flip side to this is that you may have found an undiscovered gem out there for an investment but until the rest of the public thinks the same way about that stock or commodity as you do, it ain’t going to go anywhere. Remember that the next time you decide to drop your live’s savings on some obscure stock.
Let’s see how gold closes out this week to decipher where the market is telling us that this thing might want to head next.
Click charts to enlarge in PDF format
July 26, 2011, at 10:39 pm
by Greg Hunter in the category USAWatchdog.com | Print This Post | Email This Post
by Greg Hunter in the category USAWatchdog.com |
Print This Post | Email This Post
By Greg Hunter’s USAWatchdog.com
Dear CIGAs,
Last week, this story from Reuters really got me upset. The headline read: “States negotiating immunity for banks over foreclosures.” The story said, “A coalition of all 50 states’ attorneys general has been negotiating settlements with five of the biggest U.S. banks that would include payment of up to $25 billion in penalties and commitments to follow new rules. In exchange, the banks would get immunity from civil lawsuits by the states, as well as similar guarantees by the Justice Department and Department of Housing and Urban Development, which have participated in the talks.” (Click here for the complete Reuters story.) I was outraged. I posted a link to the story on the USAWatchdog site with my commentary that said, “Negotiating with criminals!!! POX on AG’s!!!”
It has been alleged that millions of loan documents have been forged in so-called foreclosure mills because the banks did not possess the correct documents to kick people out of their homes. One name, “Linda Green,” has shown up signed differently more than 20 different ways. The name has been so widely used in the mortgage mess it is now synonymous with fraudulent mortgage documents. (Click here to read more about mortgage documents with fake signatures from the AP.)
I think investigators should be able to find evidence of fraud at the loan origination level, the securitization level and the foreclosure level. This is an outrage, and I think criminal activity is so widespread that the AG’s should be considering RICO charges, not cutting immunity deals for the bankers! The Iowa AG, Tom Miller, is spearheading negotiations for the states. He and other AG’s who signed on to the immunity deal should be ashamed and fired at the same time!! Why did Mr. Miller even bother to go to law school? I thought these guys were supposed to investigate and prosecute crimes.
More…
Jim Sinclair’s Commentary
Here is a bridge to nowhere
California Seeks $5B ’Bridge’ Loan to Pay Bills By Michael B. Marois – Jul 25, 2011 9:00 PM MT
California will borrow $5 billion today through a temporary loan as U.S. states make plans to cope with any credit-market disruption should lawmakers fail to raise the federal debt ceiling by the Aug. 2 deadline.
Proceeds from California’s bridge loan will help pay bills until the state can sell cash-flow notes that had been scheduled for late August. New Mexico is asking agencies to complete requests for federal reimbursement by midday July 29 to ensure the it can get repaid, and Maryland was forced to cut $206 million off a planned bond sale as the debt talks dragged on.
“Given the uncertainty in Washington with the debt ceiling, the treasurer felt it was prudent to get a bridge loan,” said Tom Dresslar, a spokesman for California Treasurer Bill Lockyer. “We couldn’t have planned on the president and Congress taking us to the brink.”
States and local governments face higher borrowing costs if Congress fails to reach a compromise by the deadline. Because the U.S. borrows money through the sale of Treasury notes to pay its bills and refinance maturing debt, it could default if the limit isn’t increased. That might cost the government its top- ranked credit score, upend financial markets and send interest rates higher.
Moody’s Investors Service has said it may lower its top ratings on Maryland, South Carolina, New Mexico, Tennessee and Virginia because their dependence on federal revenue makes them vulnerable to a U.S. credit cut should talks to raise the debt limit fail.
More…
Jim Sinclair’s Commentary
Turkey Bank Moves to Stem Lira Losses, Cancels Dollar Buying By Selcuk Gokoluk and Ercan Ersoy – Jul 25, 2011 2:26 AM MT
Turkey’s central bank moved to stem a slump in the lira, suspending daily purchases of dollars and cutting the cost of long-term deposits in foreign exchange. The lira pared earlier losses.
The central bank in Ankara ended daily purchases of $30 million, according to an e-mailed statement today. It also reduced the reserve requirement for banks on foreign currency deposits of more than a year by as much as 2 percentage points to 9 percent.
The bank cited the need to monitor “implementation of the decisions taken by the EU leaders to resolve European countries’ public debts.”
The lira extended a two-year low today with investors citing concern that Turkey is not doing enough to tackle a current account deficit that widened to 9 percent of economic output in May. Central bank’s efforts, including making consumer lending more costly, have so far failed to trim the import bill while export growth has slowed with the crisis in Europe.
The lira fell 0.6 percent to 1.7075 per dollar at 12:19 p.m. in Istanbul. The currency dropped as much as 2.2 percent earlier.
More…
Dear CIGAs,
Last week, this story from Reuters really got me upset. The headline read: “States negotiating immunity for banks over foreclosures.” The story said, “A coalition of all 50 states’ attorneys general has been negotiating settlements with five of the biggest U.S. banks that would include payment of up to $25 billion in penalties and commitments to follow new rules. In exchange, the banks would get immunity from civil lawsuits by the states, as well as similar guarantees by the Justice Department and Department of Housing and Urban Development, which have participated in the talks.” (Click here for the complete Reuters story.) I was outraged. I posted a link to the story on the USAWatchdog site with my commentary that said, “Negotiating with criminals!!! POX on AG’s!!!”
It has been alleged that millions of loan documents have been forged in so-called foreclosure mills because the banks did not possess the correct documents to kick people out of their homes. One name, “Linda Green,” has shown up signed differently more than 20 different ways. The name has been so widely used in the mortgage mess it is now synonymous with fraudulent mortgage documents. (Click here to read more about mortgage documents with fake signatures from the AP.)
I think investigators should be able to find evidence of fraud at the loan origination level, the securitization level and the foreclosure level. This is an outrage, and I think criminal activity is so widespread that the AG’s should be considering RICO charges, not cutting immunity deals for the bankers! The Iowa AG, Tom Miller, is spearheading negotiations for the states. He and other AG’s who signed on to the immunity deal should be ashamed and fired at the same time!! Why did Mr. Miller even bother to go to law school? I thought these guys were supposed to investigate and prosecute crimes.
More…
Jim Sinclair’s Commentary
Here is a bridge to nowhere
California Seeks $5B ’Bridge’ Loan to Pay Bills By Michael B. Marois – Jul 25, 2011 9:00 PM MT
California will borrow $5 billion today through a temporary loan as U.S. states make plans to cope with any credit-market disruption should lawmakers fail to raise the federal debt ceiling by the Aug. 2 deadline.
Proceeds from California’s bridge loan will help pay bills until the state can sell cash-flow notes that had been scheduled for late August. New Mexico is asking agencies to complete requests for federal reimbursement by midday July 29 to ensure the it can get repaid, and Maryland was forced to cut $206 million off a planned bond sale as the debt talks dragged on.
“Given the uncertainty in Washington with the debt ceiling, the treasurer felt it was prudent to get a bridge loan,” said Tom Dresslar, a spokesman for California Treasurer Bill Lockyer. “We couldn’t have planned on the president and Congress taking us to the brink.”
States and local governments face higher borrowing costs if Congress fails to reach a compromise by the deadline. Because the U.S. borrows money through the sale of Treasury notes to pay its bills and refinance maturing debt, it could default if the limit isn’t increased. That might cost the government its top- ranked credit score, upend financial markets and send interest rates higher.
Moody’s Investors Service has said it may lower its top ratings on Maryland, South Carolina, New Mexico, Tennessee and Virginia because their dependence on federal revenue makes them vulnerable to a U.S. credit cut should talks to raise the debt limit fail.
More…
Jim Sinclair’s Commentary
Default or not, confidence is broken as more countries move to protect themselves against the dollar.
Turkey Bank Moves to Stem Lira Losses, Cancels Dollar Buying By Selcuk Gokoluk and Ercan Ersoy – Jul 25, 2011 2:26 AM MT
Turkey’s central bank moved to stem a slump in the lira, suspending daily purchases of dollars and cutting the cost of long-term deposits in foreign exchange. The lira pared earlier losses.
The central bank in Ankara ended daily purchases of $30 million, according to an e-mailed statement today. It also reduced the reserve requirement for banks on foreign currency deposits of more than a year by as much as 2 percentage points to 9 percent.
The bank cited the need to monitor “implementation of the decisions taken by the EU leaders to resolve European countries’ public debts.”
The lira extended a two-year low today with investors citing concern that Turkey is not doing enough to tackle a current account deficit that widened to 9 percent of economic output in May. Central bank’s efforts, including making consumer lending more costly, have so far failed to trim the import bill while export growth has slowed with the crisis in Europe.
The lira fell 0.6 percent to 1.7075 per dollar at 12:19 p.m. in Istanbul. The currency dropped as much as 2.2 percent earlier.
More…
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_2.gif)
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/silver/t24_ag_en_usoz_2.gif)
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