Appeals Court Finds Obamacare Mandate For Individual Health Insurance Unconstitutional
Another constitutional slap in the face for the constitutional scholar. Just out from Reuters: the 11th Circuit Court of "Appeals court rules that Obama's healthcare law's individual mandate to own health insurance unconstitutional." It has thus found in favor of the 26 states that challeneged a requirement that Americans should purchase health insurance. What next: Obama takes Obamacare to the Supreme Court? And just when the summer seemed like it may finally get boring for a change...Follow The Jefferson County Chapter 9 Negotiations Live
Earlier, we noted a release that the probability of what can soon be the largest US municipal bankruptcy in history, that of Jefferson County, Alabama, is 80%. On this painfully slow day (and in the aftermath of four 400+ DJIA point swings anything would be a snooze), those who wish to follow the hearing in real time can do so here courtesy of Birmingham News. While we have described the nuances in the past, the bottom line revolves around whether the proposed debtor plan which sees a 66 cents on the dollar recovery to the creditor committee led by JPM. If indeed there is only 20% chance of default avoidance, this will likely be the catalyst event that unleashes many other comparable muni Chapter 9 filings, which would now have a case study that not only it can be done, but how it should be done.And what exactly do you think will happen... when California files Bankruptcy?
But don't worry... it's only the 8th largest economy in the world...(I know you can't be bothered with it...American Midol is on)...
California is Bankrupt
For
the past several years an increasing number of economic commentators
have been warning about the “looming bankruptcy” of the state of
California. Well, we can stop writing such commentaries, because
California’s bankruptcy is no longer merely imminent, it is here.
Once again I will make my case by beginning with definition of terms. “Bankruptcy” is defined (by Wikipedia)
as “a person or an organization that cannot repay the debts it owes to
its creditors”. Some will seek to define bankruptcy in more stringent
terms, specifically that formal “default” is required to confirm such bankrupt status.
The fact remains that a debtor who can’t repay his debts will default,
all that is uncertain is the timing. Thus to suggest that California is
“not bankrupt” simply because formal default has not (yet) occurred is
merely an exercise in both circular reasoning and semantics. To make my
case that California is “bankrupt” all that I need to do is demonstrate
that default has now become inevitable. That will not be difficult.
The
starting point here is to (once again) shatter the utterly ridiculous
myth that U.S. states and municipalities run “balanced budgets”. For
those who have not yet abandoned this nonsensical fantasy, here’s a
question for you: if California’s state and municipal governments have
been running “balanced budgets” year after year, how can it be that they collectively owe more than $100 billion in debts (not counting countless billions
more in “unfunded liabilities”)? Indeed, how could we even be
discussing “bankruptcy” with entities which supposedly balance their
budget each year?
Being able to borrow as much as you want to spend
is not a “balanced budget”. It is nothing but the most painful example
of “deadbeat math”, and it can be traced to another popular American
misconception: that the U.S. “sells bonds”. A bond is nothing more than a
category of loan. When the U.S. claims it is “selling bonds” this is
every bit as absurd as a new “homeowner” claiming that they “sold their
mortgage” to a bank. Claiming that one can “balance a budget” by
“selling bonds” is in fact a double oxymoron (or “moron squared”).
We have now established that California is a chronic debtor, which never
balances it budget. We are making progress. Now all that I need to show
is that it is utterly incapable of repaying those debts. Unfortunately
this is equally simple.
The
most telling evidence is the anecdotal examples cobbled together over
the past several years of California’s dysfunctional legislature trying to scrounge-up enough dollars to avoid debt default
in the current fiscal year. Every year we see the same farce: token
spending cuts, ever more unrealistic revenue projections, and then still
some sort of fraudulent conveyance has been required to “close the gap”
with respect to the last, few $billions. Here we can identify California’s favorite form of debt-fraud: “revenue anticipation warrants”.
The
concept of this act of fraud is simple: California is issuing yet
another form of “promise to pay”. Yet in this case, instead of flogging
more, worthless “bonds” the state deliberately chooses to give this debt
instrument a different name “revenue anticipation”.
The implied premise here is unequivocal: that California will be able to repay this debt with “surplus revenues” from the future. Note that the only way in which these warrants are not openly fraudulent is if there are surplus
revenues. Obviously if there is no “surplus” then these are not
“revenue anticipation warrants” – because what the state will do when
those warrants are due is (try to) borrow more money to pay off those warrants.
Read more: California is Bankrupt
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Jim Sinclair’s Commentary
“You can ignore reality, but you can’t ignore the consequences of ignoring reality.”–Ayn Rand
Jim Sinclair’s Commentary
Is There Enough Money on Earth to Save the Banks?By Jonathan Weil Aug 10, 2011 6:00 PM MT
Forget free-market fundamentals. What matters most to the capital markets now is whether the governments of the U.S. and western Europe have the will and the wherewithal to save the global financial system from disaster yet again.
A healthy climate for the efficient allocation of capital, this is not.
By pledging to keep its benchmark interest rate near zero through at least mid-2013, the Federal Reserve succeeded (for a couple of hours) in propping up U.S. stock markets after two days of gut-wrenching declines, especially in financial stocks. The news came a day after the European Central Bank embraced the role of savior by buying sovereign debt of Italy and Spain, sending yields on those countries’ bonds plunging and offering respite to financial institutions that hold them.
The notion that the world’s governments won’t permit an economic meltdown seemed to be operative, less than two weeks after the U.S. Congress threatened to torch the nation’s full faith and credit. Then yesterday the equities markets fell out of bed again. The open question is how long investor confidence in the policy makers’ powers can last.
This has added relevance in light of one of the developments that sent Bank of America Corp. (BAC)’s stock down 20 percent Aug. 8 — the news that American International Group Inc. (AIG) had accused the company of securities fraud in a lawsuit seeking more than $10 billion. Naturally the question arises: Didn’t AIG consult with anyone at the Treasury Department, which owns 76.7 percent of AIG, about whether to fire this market- sinking torpedo at a too-big-to-fail bank so soon after Standard & Poor’s downgraded the U.S. credit rating?
More…
Jim Sinclair’s Commentary
Re-institution of the uptick rule levels the playing field and is the only real answer to bear manipulative raids.
Short-selling banned in 4 European countriesBy ANGELA CHARLTON, GREG KELLER
updated 8/11/2011 6:40:18 PM ET
PARIS — France, Italy, Spain and Belgium are banning short-selling on select stocks amid efforts to calm market turmoil that has sent bank shares gyrating wildly and aggravated worries about Europe’s huge debts.
The European Union’s markets supervisor, the ESMA, announced the move late Thursday night after boosting surveillance of stormy markets earlier in the day. The move capped two days of whipsaw trading that saw French banks’ market value fall and rise by billions of euros.
In a short sale, a trader hopes to make a profit by betting on the decline in the price of a share. The practice has been blamed for contributing to market volatility.
The ESMA said in a statement that the four countries “have today announced or will shortly announce new bans on short-selling or on short positions” as of Friday.
The French market regulator, the AMF, announced late Thursday that it is banning for 15 days net short-selling on 11 stocks, including those of banks Societe Generale, BNP Paribas and Credit Agricole and leading insurers.
Belgium’s market authority said it would ban short-selling on financial shares such as leading banks and insurers as of Friday. Belgium had already banned naked short selling, basically a bet on a decline in the price of a share without borrowing the share, since August 2008.
More…
Jim Sinclair’s Commentary
Depression Decade in Europe If Italy Defaults: AnalystPublished: Friday, 12 Aug 2011 | 5:07 AM ET
By: Catherine Boyle
As the European markets were braced for another turbulent day, one analyst at Citi warned that a decade of economic slowdown could follow if Italy and Spain default on their debt repayments.
“If you let Italy and Spain default, you will have 10 years of depression in Europe,” Matt King, global head of credit strategy at Citi, told CNBC Friday.
The euro zone once again seems endangered by market turbulence this week after France, the region’s second-largest economy, became the latest country to face speculation about its credit rating and mass sell-offs in its major banking stocks.
Disappointing economic data released on Friday showing that French economic growth was zero in the second quarter of 2011 increased the pressure on President Nicolas Sarkozy.
This followed a 0.9 percent increase in growth in the first quarter. Declining household consumption was cited as the main factor in the lack of growth.
“Rumours are still swirling around France,” John Wraith, fixed income strategist, BofA Merrill Lynch Global Research, told CNBC Friday.
“All of the countries in the euro zone are getting dragged into this vortex as the situation gets worse in the periphery.”
This week, French banking stocks have suffered huge declines as panic about their exposure to peripheral euro zone economies spreads.
The mass sell-off has led to a ban on short-selling in France, Italy, Spain and Belgium for at least 15 days, starting Friday.
French banks have $450 billion of exposure to Italy, according to King, who doesn’t think Italy will end up defaulting.
More…
Jim Sinclair’s Commentary
Postal Service proposing cutting 120,000 jobs
Also wants union contracts, employee health and pension benefits changedBy RANDOLPH E. SCHMID
updated 8/11/2011 6:35:16 PM ET
The financially strapped U.S. Postal Service is considering cutting as many as 120,000 jobs.
Facing a second year of losses totaling $8 billion or more, the agency also wants to pull its workers out of the retirement and health benefits plans covering federal workers and set up its own benefit systems.
Congressional approval would be needed for either step, and both could be expected to face severe opposition from postal unions which have contracts that ban layoffs.
The post office has cut 110,000 jobs over the last four years and is currently engaged in eliminating 7,500 administrative staff. In its 2010 annual report, the agency said it had 583,908 career employees.
The loss of mail to the Internet and the decline in advertising caused by the recession have rocked the agency.
Postal officials have said they will be unable to make a $5.5 billion payment to cover future employee health care costs due Sept. 30. It is the only federal agency required to make such a payment but, because of the complex way government finances are counted, eliminating it would make the federal budget deficit appear $5.5 billion larger.
If Congress doesn’t act and current losses continue, the post office will be unable to make that payment at the end of September because it will have reached its borrowing limit and simply won’t have the cash to do so, the agency said earlier.
More…
Jim Sinclair’s Commentary
BofA Sells Part of Mortgage Portfolio to Fannie MaeBY DAN FITZPATRICK
Bank of America Corp. has agreed to sell part of its home-loan portfolio to government-controlled housing giant Fannie Mae, as the bank looks to shed assets and pare its exposure to an array of mortgage woes.
The deal, finalized last Friday, will deliver the rights to process and collect payments on a pool of 400,000 loans with an unpaid principal balance of $73 billion, people familiar with the deal said. The purchase price is more than $500 million, one …
More…
Hi Jim,
I woke up grumpy today knowing that the Comex was going to make it harder for our citizens to protect themselves and how it would very short term affect the price of Gold. However, it was a day off and after a swim, I went salmon fishing for a few hours and after that straightened my head out, I sat down and culled out 2 years of a collection of many sources, including some wonderful material you so graciously published as well as others including Richard Russell’s daily ruminations.
Once again I saved so many pearls you so generously made available. Thank you! It is sad to see what is unfolding, a slow motion train wreck! You have helped clarify the MAGNITUDE of the problem that will inevitably express itself in the price of Gold.
Please buffer yourself from the sirens of hangers on and late comers.
Stay well!
CIGA Jim S, M.D.
Dear Dr. S,
Before gold and silver reach full valuation the Comex will have increased margins to CASH only, 100% margin, paper ETF delivery.
Regards,
Jim
Stay Firm In Your Disciplines
CIGA Eric
Jim offers some excellent advice below. I also remind Jim’s extended family and all readers to follow the money. One of my favorite techniques of doing so is statistical concentration by the various players within the leverage markets. This technique, often encapsulated by the various diffusion indices, can be used to reduce aggressive trading positions, increase long-term holdings, or encourage patient observation on sidelines until opportunity strikes. Investing discipline is a physical and mental game that requires the ability to follow the money.
Gold London P.M Fixed and Gold Diffusion Index (DI)
Silver London P.M Fixed and the Silver Diffusion Index (DI)
My Dear Extended Family:
Source: jsmineset.com
More…
If you find useful information here, please consider making a small donation, to help cover cost of running this blog. Without your support I will be forced to shut down this blog soon.
Thank You
I'm PayPal Verified Jim Sinclair’s Commentary
This is the foundational fact that supports my position that we
have not seen anything yet. Stay prepared, stay hedged, stand strong.
This approach will exceed the returns of the speculator. Your protection is my joy.
“You can ignore reality, but you can’t ignore the consequences of ignoring reality.”–Ayn Rand
Jim Sinclair’s Commentary
Sure there is enough money if you simply print it electronically.
Is There Enough Money on Earth to Save the Banks?By Jonathan Weil Aug 10, 2011 6:00 PM MT
Forget free-market fundamentals. What matters most to the capital markets now is whether the governments of the U.S. and western Europe have the will and the wherewithal to save the global financial system from disaster yet again.
A healthy climate for the efficient allocation of capital, this is not.
By pledging to keep its benchmark interest rate near zero through at least mid-2013, the Federal Reserve succeeded (for a couple of hours) in propping up U.S. stock markets after two days of gut-wrenching declines, especially in financial stocks. The news came a day after the European Central Bank embraced the role of savior by buying sovereign debt of Italy and Spain, sending yields on those countries’ bonds plunging and offering respite to financial institutions that hold them.
The notion that the world’s governments won’t permit an economic meltdown seemed to be operative, less than two weeks after the U.S. Congress threatened to torch the nation’s full faith and credit. Then yesterday the equities markets fell out of bed again. The open question is how long investor confidence in the policy makers’ powers can last.
This has added relevance in light of one of the developments that sent Bank of America Corp. (BAC)’s stock down 20 percent Aug. 8 — the news that American International Group Inc. (AIG) had accused the company of securities fraud in a lawsuit seeking more than $10 billion. Naturally the question arises: Didn’t AIG consult with anyone at the Treasury Department, which owns 76.7 percent of AIG, about whether to fire this market- sinking torpedo at a too-big-to-fail bank so soon after Standard & Poor’s downgraded the U.S. credit rating?
More…
Jim Sinclair’s Commentary
Re-institution of the uptick rule levels the playing field and is the only real answer to bear manipulative raids.
Short-selling banned in 4 European countriesBy ANGELA CHARLTON, GREG KELLER
updated 8/11/2011 6:40:18 PM ET
PARIS — France, Italy, Spain and Belgium are banning short-selling on select stocks amid efforts to calm market turmoil that has sent bank shares gyrating wildly and aggravated worries about Europe’s huge debts.
The European Union’s markets supervisor, the ESMA, announced the move late Thursday night after boosting surveillance of stormy markets earlier in the day. The move capped two days of whipsaw trading that saw French banks’ market value fall and rise by billions of euros.
In a short sale, a trader hopes to make a profit by betting on the decline in the price of a share. The practice has been blamed for contributing to market volatility.
The ESMA said in a statement that the four countries “have today announced or will shortly announce new bans on short-selling or on short positions” as of Friday.
The French market regulator, the AMF, announced late Thursday that it is banning for 15 days net short-selling on 11 stocks, including those of banks Societe Generale, BNP Paribas and Credit Agricole and leading insurers.
Belgium’s market authority said it would ban short-selling on financial shares such as leading banks and insurers as of Friday. Belgium had already banned naked short selling, basically a bet on a decline in the price of a share without borrowing the share, since August 2008.
More…
Jim Sinclair’s Commentary
Decades of currency induced cost push inflation, aka hyperinflation, is a better title.
Depression Decade in Europe If Italy Defaults: AnalystPublished: Friday, 12 Aug 2011 | 5:07 AM ET
By: Catherine Boyle
As the European markets were braced for another turbulent day, one analyst at Citi warned that a decade of economic slowdown could follow if Italy and Spain default on their debt repayments.
“If you let Italy and Spain default, you will have 10 years of depression in Europe,” Matt King, global head of credit strategy at Citi, told CNBC Friday.
The euro zone once again seems endangered by market turbulence this week after France, the region’s second-largest economy, became the latest country to face speculation about its credit rating and mass sell-offs in its major banking stocks.
Disappointing economic data released on Friday showing that French economic growth was zero in the second quarter of 2011 increased the pressure on President Nicolas Sarkozy.
This followed a 0.9 percent increase in growth in the first quarter. Declining household consumption was cited as the main factor in the lack of growth.
“Rumours are still swirling around France,” John Wraith, fixed income strategist, BofA Merrill Lynch Global Research, told CNBC Friday.
“All of the countries in the euro zone are getting dragged into this vortex as the situation gets worse in the periphery.”
This week, French banking stocks have suffered huge declines as panic about their exposure to peripheral euro zone economies spreads.
The mass sell-off has led to a ban on short-selling in France, Italy, Spain and Belgium for at least 15 days, starting Friday.
French banks have $450 billion of exposure to Italy, according to King, who doesn’t think Italy will end up defaulting.
More…
Jim Sinclair’s Commentary
Government fights unemployment!
Postal Service proposing cutting 120,000 jobs
Also wants union contracts, employee health and pension benefits changedBy RANDOLPH E. SCHMID
updated 8/11/2011 6:35:16 PM ET
The financially strapped U.S. Postal Service is considering cutting as many as 120,000 jobs.
Facing a second year of losses totaling $8 billion or more, the agency also wants to pull its workers out of the retirement and health benefits plans covering federal workers and set up its own benefit systems.
Congressional approval would be needed for either step, and both could be expected to face severe opposition from postal unions which have contracts that ban layoffs.
The post office has cut 110,000 jobs over the last four years and is currently engaged in eliminating 7,500 administrative staff. In its 2010 annual report, the agency said it had 583,908 career employees.
The loss of mail to the Internet and the decline in advertising caused by the recession have rocked the agency.
Postal officials have said they will be unable to make a $5.5 billion payment to cover future employee health care costs due Sept. 30. It is the only federal agency required to make such a payment but, because of the complex way government finances are counted, eliminating it would make the federal budget deficit appear $5.5 billion larger.
If Congress doesn’t act and current losses continue, the post office will be unable to make that payment at the end of September because it will have reached its borrowing limit and simply won’t have the cash to do so, the agency said earlier.
More…
Jim Sinclair’s Commentary
Is there another buyer? When it is all said and done you just bought that junk.
BofA Sells Part of Mortgage Portfolio to Fannie MaeBY DAN FITZPATRICK
Bank of America Corp. has agreed to sell part of its home-loan portfolio to government-controlled housing giant Fannie Mae, as the bank looks to shed assets and pare its exposure to an array of mortgage woes.
The deal, finalized last Friday, will deliver the rights to process and collect payments on a pool of 400,000 loans with an unpaid principal balance of $73 billion, people familiar with the deal said. The purchase price is more than $500 million, one …
More…
Hi Jim,
I woke up grumpy today knowing that the Comex was going to make it harder for our citizens to protect themselves and how it would very short term affect the price of Gold. However, it was a day off and after a swim, I went salmon fishing for a few hours and after that straightened my head out, I sat down and culled out 2 years of a collection of many sources, including some wonderful material you so graciously published as well as others including Richard Russell’s daily ruminations.
Once again I saved so many pearls you so generously made available. Thank you! It is sad to see what is unfolding, a slow motion train wreck! You have helped clarify the MAGNITUDE of the problem that will inevitably express itself in the price of Gold.
Please buffer yourself from the sirens of hangers on and late comers.
Stay well!
CIGA Jim S, M.D.
Dear Dr. S,
Before gold and silver reach full valuation the Comex will have increased margins to CASH only, 100% margin, paper ETF delivery.
Regards,
Jim
Stay Firm In Your Disciplines
CIGA Eric
Jim offers some excellent advice below. I also remind Jim’s extended family and all readers to follow the money. One of my favorite techniques of doing so is statistical concentration by the various players within the leverage markets. This technique, often encapsulated by the various diffusion indices, can be used to reduce aggressive trading positions, increase long-term holdings, or encourage patient observation on sidelines until opportunity strikes. Investing discipline is a physical and mental game that requires the ability to follow the money.
Gold London P.M Fixed and Gold Diffusion Index (DI)
Silver London P.M Fixed and the Silver Diffusion Index (DI)
My Dear Extended Family:
Now that we have reached $1752.20 gold, what should you do?
Stay firm in your disciplines. During this entire market
chasing strength in gold has proven dangerous more often than not.
Angels should be looked at for the mad trader as areas to lighten, not
double up. You can win this game with a ruler, but you will have to stay
up 24 hours a day. We have not had a blow off top in gold but there has
been epic short covering in world markets. That type of action weakens
short term markets. The best buys now are identified by a simple ruler
with more complex firming internals.
The holder of the right position that shows the patience of
Seligman and Livermore always take the greatest prize. Gold has made no
meaningful top, but volatility has only one way to go and that is up.
Our respected colleague Alf Fields would agree that traders better have
karma on their side, but the gold market is nowhere near full valuation.
Be careful traders but stand strong those of us who have hedged against
the insolvable problems of the entire Western World. Your successful
protection is my reward greater than money, greater than matter. See you
in the morning.
1. Those holding gold to hedge the systemic risks of the Western Financial world simply stay in your position.
2. Traders lighten up your positions as gold approaches the next two Angels.
3. No market fails to have reactions at some point.
4. Reactions in this market will be deep, but brief when they occur.
5. The undervaluation of good gold shares has passed manic.
6. Utilization of some of your gold profits into good gold shares is pure logic.
Respectfully,
Jim
Source: jsmineset.com
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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