by Marco Vicenzino, The Hill
Contrary to its leader’s claim, Spain’s bank bailout does not
represent a Euro victory but desperately needed temporary relief. It
buys indispensable time for Spain, and the Eurozone, to act more
decisively and shore up credibility in international markets just prior
to Greece’s approaching election and its potential fallout, including a
Euro-exit.
Unlike Greece, Spain can service its debts through a reasonable long-term arrangement but cannot do it alone. The immediate plan provides a crucial soft-landing but an expanded bailout beyond its banks is required in the not too distant future. The broader fundamental question is not whether the Euro will survive but who will survive in the Euro. Spain clearly teeters on the brink. An arduous and painful road lies ahead.
Read More @ TheHill.com
Contrary to its leader’s claim, Spain’s bank bailout does not
represent a Euro victory but desperately needed temporary relief. It
buys indispensable time for Spain, and the Eurozone, to act more
decisively and shore up credibility in international markets just prior
to Greece’s approaching election and its potential fallout, including a
Euro-exit.Unlike Greece, Spain can service its debts through a reasonable long-term arrangement but cannot do it alone. The immediate plan provides a crucial soft-landing but an expanded bailout beyond its banks is required in the not too distant future. The broader fundamental question is not whether the Euro will survive but who will survive in the Euro. Spain clearly teeters on the brink. An arduous and painful road lies ahead.
Read More @ TheHill.com
Rosenberg Defines European Insanity
The situation in Europe goes from bad to worse. Gluskin Sheff's David Rosenberg is back to his bearish roots as he remind us that 'throwing more debt after bad debts ends up meaning more debt'. As he notes, the definition of insanity is (via Bloomberg TV):When you realize that of the potential $100 billion to spend, 22% of that has to be provided by Italy and their lending to Spain is at 3% but Italy has to borrow at 6%. They have to lend to Spain $22bn at 3% - it is just madness. Everybody is getting worried again. The solution that they seem to have come up with seems to be worse than the problem in the first place.
From Capital To Salary Control: France To Cap State-Owned Company Executive Pay
At this point there is no longer a point in commenting the daily insanity coming out of Europe. Central planning everywhere, in everything and for everyone.- FRANCE TO LIMIT EXECUTIVE PAY TO 20 TIMES LOWEST SALARY: FIGARO
- FRANCE TO CURB PAY OF HEADS OF STATE-OWNED COS., FIGARO REPORTS
- ECONOMY MINISTRY TO ANNOUNCE DECISION TOMORROW, FIGARO SAYS
- FRENCH PAY CURB AT COS. WITH GOVT MAJORITY STAKE, FIGARO SAYS
The US "Budget Surplus" Miracle Is Over: $125 Billion Deficit In May
One month ago we were pleasantly surprised to
note that following 42 straight months of budget deficits, among them
record ones, such as the ($231.7) billion recorded in February, the US
finally managed to record its first budget surplus since September
2008. The number was a modest but positive $58 billion, although there
was once again more than meets the eye. On May 7 we said that
"without various temporal adjustments, the April surplus of $58 billion
would have been completely netted out by the cumulative $57 billion in
deficit time shifts." More importantly, we said, "In other words,
enjoy the surplus while you can: for another 30 or so days." Sure
enough, 30 days later, the number is out, and it is back to normality: the US recorded a deficit of $125 billion in May, on outlays of $305 billion and revenues of $181 billion. And so the "surplus" miracle is over.China Tells U.S. What It Can Do With Its Iran Oil Import Sanctions
While the US magnanimously decided to exempt several nations from U.S. sanctions on Iranian oil imports, it appears the Chinese government has indicated it has no plans to change its position on oil purchases from Iran. As Voice of America reports,
China's FinMin spokesman Liu Weimin said the purchases are necessary,
because of its economic development, describing their 'purchase
channels' as 'completely legal' and 'normal, open, and transparent'.
China is the world's largest buyer of Iranian oil and is the last
remaining major importer exposed to possible penalties when the U.S.
sanctions are imposed, likely later this month. When asked if China and
the United States are still in discussion about the sanctions, the
spokesman would only say that Beijing has clearly informed Washington of its position.
China's purchases of oil from Iran declined earlier this year, but
analysts say the cutback was the result of a price dispute. Purchases went back up in April and have continued. Raise to you Hillary.More On Greece And More QE
Dave in Denver at The Golden Truth - 1 hour ago
One of the biggest issues in Europe at the moment is whether or not Greece
will exit, or be allowed to exit, the EU. My view is that the massive
bailouts that have been going on globally since 2008, starting with the
massive taxpayer bailout of the big U.S. banks, are about saving the banks
and not about saving countries. Because of this, I would argue that Greece
will be kept in the EU family and the financial systems in
Spain/Italy/France/England/U.S. will be re-monetized, likely in that order.
But let's look just at Greece for a moment. It has been estimated that the
big banks ... more »
Gold Market Continues to Reflect Currency Turmoil
Trader Dan at Trader Dan's Market Views - 2 hours ago
Simply put - as the situation in Europe further deteriorates (yesterday the
market YAWNED at the $125 billion Spain bailout), Italy is now coming into
focus. Strangely enough, the US equity markets somehow think all of this is
inconsequential as the bulls there continue to be giddy with delight.
Their attitude is best described by an old Steve Wariner song, "Some Fools
Never Learn". You play with the fire, you're gonna get burned".
Considering just how tenuous things are, the degree of complacency that
exists among equity bulls is nothing short of astonishing. The situation
can best... more »
Video: Very Worried About Central Banks
Admin at Jim Rogers Blog - 6 hours ago
*
*
*
*
*Jim Rogers is an author, financial commentator and successful
international investor. He has been frequently featured in Time, The New
York Times, Barron’s, Forbes, Fortune, The Wall Street Journal, The
Financial Times and is a regular guest on Bloomberg and CNBC.*Banks Are An Endangered Species
In the long run, all the hullabaloo about the various global banking crises is just hot air.
The old establishment banks — the ones that have been bailed out this
week in Spain, and in 2008 in America — are unnecessary middlemen. This
is because of the ludicrous spreads from which they profit. They borrow
from central banks and from depositors at absurdly low rates of
interest (that’s what ZIRP is all about) and lend at vastly higher
rates. What useful function does it serve? At one time, banks generated
value by being wise lenders, lending to businesses that they determined
would add value. Today they prefer gamble up even bigger profits in
the zero-sum derivatives casino and shadow banking whorehouse,
requiring frequent bailouts when such schemes go awry. They are
dinosaurs that offer no real value to their shareholders, their
customers, or to society.
Hmmm. It’s Tuesday. Gold and silver both just surged rather nicely. Gee, I wonder why…
For your answer, simply do two things:
- Look at the calendar and notice that it’s Tuesday
- Think about the market action of late last week
Always remember and never forget that the Commitment of Traders survey is every Tuesday at 1:30 pm NY time. This means that, by the Comex close, The Forces of Darkness must adjust their books to account for/HIDE any clues to their past week of “activity”. Lately, as discussed here ( http://www.tfmetalsreport.com/blog/3841/terrible-tuesdays), Tuesdays have been terrible. As you know, The Cartels have been actively buying and covering while the silly specs have been selling. To cover some tracks before the survey, The Cartels have sold on Tuesdays, thus the name “Terrible Tuesdays”.
Read More @ TF Metals Report.com
[Ed. Note: As WhatReallyHappened.com
rightly notes: Translation: "You caught us with another Iran-Contra gun
and drug running operation and you better shut up about it or we'll
bring down the entire government."]
by Tim Mak and Josh Gerstein, Politico:
Under threat of a House contempt citation over the botched Fast and Furious
gun-walking operation, Attorney General Eric Holder spoke in a
conciliatory tone Tuesday about his willingness for “compromises” to
avoid what he called “an impending constitutional crisis” over the
withholding of documents in response to a congressional subpoena.
“We are prepared to make – I am prepared to make – compromises with regard to the documents that can be made available,” said Holder in a hearing before the Senate Judiciary Committee.
“I want to make it very clear that I am offering – I myself – to sit down with the Speaker, the chairman, with you, whoever, to try and work our way through this in an attempt to avoid a constitutional crisis, and come up with ways, creative ways, in which to make this material available. But I’ve got to have a willing partner. I’ve extended my hand, and I’m waiting to hear back,” he added in response to a question about the subpoenaed documents posed by Sen. Chuck Grassley (R-Iowa.)
Read More @ Politico.com
by Tim Mak and Josh Gerstein, Politico:
Under threat of a House contempt citation over the botched Fast and Furious
gun-walking operation, Attorney General Eric Holder spoke in a
conciliatory tone Tuesday about his willingness for “compromises” to
avoid what he called “an impending constitutional crisis” over the
withholding of documents in response to a congressional subpoena.“We are prepared to make – I am prepared to make – compromises with regard to the documents that can be made available,” said Holder in a hearing before the Senate Judiciary Committee.
“I want to make it very clear that I am offering – I myself – to sit down with the Speaker, the chairman, with you, whoever, to try and work our way through this in an attempt to avoid a constitutional crisis, and come up with ways, creative ways, in which to make this material available. But I’ve got to have a willing partner. I’ve extended my hand, and I’m waiting to hear back,” he added in response to a question about the subpoenaed documents posed by Sen. Chuck Grassley (R-Iowa.)
Read More @ Politico.com
by Dave Hodges, Freedoms Phoenix:
I awoke several days ago to a devastating punch in the gut. I was
overcome by feelings of abandonment and betrayal just like the feelings
that a husband would experience when he realizes that his wife has been
unfaithful and his best friend is his wife’s new lover. I am
experiencing anger, depression and a sense of profound discouragement as
I feel compelled to write these words.
Ron Paul has done more to wake up millions of former bankster serving sheeple in this country to the tyranny that is the New World Order than anyone else. He has helped to expose the criminal Federal Reserve and the general and pervasive “sell out” of Americans and our sovereign interests by the bankster minions (i.e. Obama and Romney). As a result, millions of Americans put their faith in this country doctor who has had one of the best voting records in the history of the House of Representatives. I will be eternally grateful to Ron Paul for his tireless support and defense of freedom.
Read More @ FreedomsPhoenix.com
I awoke several days ago to a devastating punch in the gut. I was
overcome by feelings of abandonment and betrayal just like the feelings
that a husband would experience when he realizes that his wife has been
unfaithful and his best friend is his wife’s new lover. I am
experiencing anger, depression and a sense of profound discouragement as
I feel compelled to write these words.Ron Paul has done more to wake up millions of former bankster serving sheeple in this country to the tyranny that is the New World Order than anyone else. He has helped to expose the criminal Federal Reserve and the general and pervasive “sell out” of Americans and our sovereign interests by the bankster minions (i.e. Obama and Romney). As a result, millions of Americans put their faith in this country doctor who has had one of the best voting records in the history of the House of Representatives. I will be eternally grateful to Ron Paul for his tireless support and defense of freedom.
Read More @ FreedomsPhoenix.com
from BBC via, demonaz28121985 :
The Last Days of Lehman Brothers is a BBC television film. The drama was inspired by the real events that occurred over the weekend leading up to the bankruptcy of Lehman Brothers on 15 September 2008.
The Last Days of Lehman Brothers is a BBC television film. The drama was inspired by the real events that occurred over the weekend leading up to the bankruptcy of Lehman Brothers on 15 September 2008.
by Andrew Hoffman, MilesFranklin.com:
Fresh off this morning’s angry RANT, I’d like to speak of a topic near
and dear to my heart – the STOCK MARKET. At least it used to be, but in
recent years became a MANIPULATED nightmare – so much so, I have sworn
off it forever, realizing it poses not just a grave risk to my finances,
but my sanity and personal relationships.
Born in New York in 1970, I had money “in my blood.” I studied finance in college, read the Wall Street Journal cover to cover from age 18 (until I became disgusted with it ten years later), had internships at Paine Webber, Shearson Lehman Brothers, Merrill Lynch, AG Edwards, and Prudential-Bache before I graduated, and received my CFA designation in 1998 – long before the world realized its value.
From the second I started watching it – in 1989 – the market dominated my life. I watched every tick, every day, aware of ALL major developments affecting it. In 1996 – after three years as a bond broker at Cantor Fitzgerald – I finally got my opportunity to work with the stock market, as a trader/analyst/administrator of a NYC hedge fund. In fact, I started at Keim-Wilson in February 1996, just ten months before Alan Greenspan’s famous “irrational exuberance” comment – which, contrarily, ushered in the final, parabolic stages of the internet bull.
Read more @ MilesFranklin.com
Fresh off this morning’s angry RANT, I’d like to speak of a topic near
and dear to my heart – the STOCK MARKET. At least it used to be, but in
recent years became a MANIPULATED nightmare – so much so, I have sworn
off it forever, realizing it poses not just a grave risk to my finances,
but my sanity and personal relationships.Born in New York in 1970, I had money “in my blood.” I studied finance in college, read the Wall Street Journal cover to cover from age 18 (until I became disgusted with it ten years later), had internships at Paine Webber, Shearson Lehman Brothers, Merrill Lynch, AG Edwards, and Prudential-Bache before I graduated, and received my CFA designation in 1998 – long before the world realized its value.
From the second I started watching it – in 1989 – the market dominated my life. I watched every tick, every day, aware of ALL major developments affecting it. In 1996 – after three years as a bond broker at Cantor Fitzgerald – I finally got my opportunity to work with the stock market, as a trader/analyst/administrator of a NYC hedge fund. In fact, I started at Keim-Wilson in February 1996, just ten months before Alan Greenspan’s famous “irrational exuberance” comment – which, contrarily, ushered in the final, parabolic stages of the internet bull.
Read more @ MilesFranklin.com
Ettore
Gotti Tedeschi, the former head of the Holy See’s bank compiled a
secret dossier of compromising information about the Vatican because he
feared for his life
By Nick Squires, The Telegraph:
In the latest twist in a scandal which has convulsed the papacy of
Benedict XVI, Mr Tedeschi reportedly gave copies of the documents to his
closest confidantes and told them: “If I am killed, the reason for my
death is in here. I’ve seen things in the Vatican that would frighten
anyone.”
One of the documents was reportedly titled “internal enemies” and contained the names of senior clergy and powerful Italian politicians.
Other emails and letters related to “money of dubious provenance” being allegedly funneled through the Vatican bank, according to Corriere della Sera.
Appointed in 2009, the 67-year-old banker was sacked as head of the Vatican’s bank on May 24 – the day after the Pope’s butler was arrested on suspicion of stealing confidential letters from Benedict’s desk and leaking them to journalists.
Mr Gotti Tedeschi was allegedly ousted by Cardinal Tarcisio Bertone, who as the Vatican secretary of state is the Pope’s deputy, in a dispute over efforts to improve the transparency of the scandal-ridden bank, known formally as the Institute for Religious Works.
Read More @ Telegraph.co.uk
The CBO Sees the Economic Cliff Ahead Posted on June 11, 2012 by Admin
Last week the Congressional Budget Office (CBO) issued its annual long-term budget outlook report, and the 2012 numbers are not promising. In fact, the CBO estimates that federal debt will rise to 70% of GDP by the end of the year– the highest percentage since World War II. The report also paints a stark picture of entitlement spending, as retiring Baby Boomers will cause government spending on health care, Social Security, and Medicare to explode as a percentage of GDP in coming years.
While the mainstream media correctly characterized the CBO report as highly pessimistic, they also ignored longstanding errors of methodology in CBO estimates. And those errors tend to support arguments for higher taxes and government spending, when in fact America needs exactly the opposite.
As Paul Roderick Gregory explained in a recent Forbes column, CBO has always applied wrongheaded assumptions inherent in Keynesian economics when forecasting future deficits – no matter how many times both history and economic theory have proven such assumptions incorrect. In particular, CBO seems wedded to two enduring Keynesian myths: First, that higher taxes necessarily increase federal revenue and have no negative effect on the economy; and second, that lower government spending hurts the economy. Neither is true, of course.
CBO also fails to factor in unexpected wars and expensive foreign entanglements, and we should not assign too much validity to predictive models based on peace. Judging from the actions and rhetoric coming from both parties in Washington, new military entanglements in Syria and Iran may well spike military spending in coming years.
Despite these sobering budget realities, the CBO report suggests that a solution is possible with merely a few minor adjustments in the way Congress handles economic issues. But what we need are not minor adjustments, but rather a fundamental shift in our philosophy of government. If we could come to our senses about the proper role of government in America, and what level of government interference is appropriate in a free economy, we would quickly find that there is no reason for government to spend so much, borrow so much, and tax so much.
More…
Jim Sinclair’s Commentary
Fitch downgrades Spain’s Banco Santander and Banco Bilbao
Fitch credit ratings agency has downgraded Spain’s two largest international banks Banco Santander and Banco Bilbao Vizcaya Argentaria (BBVA) from A to triple B plus.
The international credit agency said on Monday that the downgrades were primarily because Spanish sovereign debt ratings had been downgraded to BBB- from A- on June 7 and also due to forecasts that Spain’s faltering economy would remain in recession throughout this year and also in 2013.
The downgrades "reflect similar concerns to those that have affected the Spanish sovereign rating, in particular, that Spain is forecasted to remain in recession through the remainder of this year and 2013 compared to the previous expectation that the economy would benefit from a mild recovery," Fitch said in a statement.
The move comes just two days after eurozone finance ministers agreed to help Spain’s troubled banking sector with a 100 billion euros loan.
On Thursday, Fitch downgraded Spain’s long-term foreign and local currency rating by three notches citing the country’s banking crisis, mushrooming debt and recession as the main reasons for the downgrade.
More…
Jim Sinclair’s Commentary
Top Customer: Under Obama, Fed’s Holdings of U.S. Debt Have Jumped 452% By Terence P. Jeffrey
June 7, 2012
(CNSNews.com) - Since President Barack Obama was inaugurated in January 2009, the Federal Reserve’s holdings of U.S. government debt have quintupled, according to the Fed’s official monthly balance sheet.
On Jan. 28, 2009, a week after Obama’s nomination, the Fed owned $302 billion in U.S. Treasury securities. On April 25, 2012, the latest date reported, the Fed owned five and a half time that much in U.S. Treasury securities–$1.668 trillion.
That is an increase from January 2009 of $1.366 trillion—or 452 percent.
Under Obama, the Federal Reserve has become the single largest owner of U.S. government debt. When Obama entered office, entities in the People’s Republic of China were the largest holders, followed by entities in Japan. At the end of January 2009, China owned $739.6 billion in U.S. government debt and Japan owned $634.8 billion.
By the end of March 2012, China’s holdings of U.S. debt had grown to $1.1699 trillion and Japan’s holdings had grown to $1.083 trillion.
Together, the Federal Reserve, China and Japan had increased their holdings of U.S. debt by $2.2445 trillion since Obama took office.
More…
Jim Sinclair’s Commentary
Greece will run out of money in ‘a few weeks’ says former Prime Minister George Papandreou Posted on 12 June 2012
After the Spanish banking bailout drama the action now swings back to Greece for the election this weekend. Former Prime Minister George Papandreou tells Bloomberg TV’s Sara Eisen that Greece has ‘a few weeks’ before its government runs out of money and that this is a ‘make or break’ period.
What a classic understatement: Greece is going down and wants to pull the whole global financial system down with it. In short, the message is save us or you destroy your system. It is this sort of blackmail and subterfuge that has gotten Greece into such a horrendous mess.
More…
Jim Sinclair’s Commentary
Worry for Italy Quickly Replaces Relief for Spain By LIZ ALDERMAN and ELISABETTA POVOLEDO
VENICE — Concerns grew on Monday that Italy could be the next victim of Europe’s financial infection, leading nervous investors to sell Italian stocks and bonds and damping euphoria over a weekend deal to bail out Spain’s banks.
Italian officials privately expressed concern that the 100 billion euros, or $125 billion, that Europe pledged to Spanish banks might not stop the troubles from spreading.
Italy’s main stock index was Europe’s worst performer on Monday, a day when United States stocks were also dragged down and investors flocked yet again to the safe harbor of American and German government bonds. Even the Italian prime minister, Mario Monti, a European technocrat who came to office after the euro crisis forced out Silvio Berlusconi last November, has begun to acknowledge the dangers posed to his country’s 1.56-trillion-euro economy ($1.95 trillion).
The main fear is that Italy cannot grow its way out of a recession fast enough to pay a mountainous national debt. Other concerns include the fact that Italy, with the third-largest euro zone economy after those of Germany and France, will have to shoulder a large portion of the bailout bill even as it grapples with its own sharp economic downturn.
More…
Jim Sinclair’s Commentary
Italian 10 year yields have pushed higher after the outside day. We are above the reverse head and shoulders neckline at 6.03% and a close above would confirm this break suggesting a move to the Nov 2011 highs again. Worse still we see a bear flattening of the Italian 2’s versus 10’s curve today, reflecting a more urgent concern in Italian Fixed Income markets.
Italian Equities also remain under pressure after yesterday’s bearish daily reversal and the European Banks Index also looks weak as it fails to sustain above good resistance levels.
Jim,
Care to comment?
Turkish people can pay in gold in certain foreign exchange houses and most jewellers will accept gold as payment. Turkish banks are is now offering digital gold saving accounts.
Turkey expanded its gold reserves by 29.7 metric tons in April. Turkey’s bullion reserves climbed to 239.3 tons last month meaning that Turkey increased their gold reserves by 14% in April.
The central bank on March 27 doubled the share of lira reserves banks can hold in gold to 20%, saying it would provide 6.1 billion liras ($3.3 billion) of extra liquidity.
"This addition," the WGC says, "was the result of a policy change under which the central bank will now accept gold in reserve requirements from commercial banks to help the banks utilize their gold in managing their liquidity."
CIGA Derek A
Dear Derek,
Gold Deposits Of USD 1 Billion To Be Collected By Turkish Bank Published in Market Update Precious Metals Update on 12 June 2012
Today’s AM fix was USD 1,589.25, EUR 1,271.40, and GBP 1,025.65 per ounce.
Yesterday’s AM fix was USD 1,593.00, EUR 1,264.79, and GBP 1,023.45 per ounce.
Silver is trading at $28.67/oz, €22.92/oz and £18.52/oz. Platinum is trading at $1,448.00/oz, palladium at $618.00/oz and rhodium at $1,200/oz.
Gold 1 Month Chart – (Bloomberg)
Gold climbed $5.60 or 0.35% yesterday in New York and closed at $1,600.20/oz despite stock markets giving up early gains on misguided optimism regarding the Spanish “bailout”.
Gold fell initially in Asia before trading sideways and this range trading has continued in European trading.
More…
Hi Jim,
An update on the front page of the FT online declares: ‘Hong Kong Urged To Review Dollar Peg’.
Looks like you are right again – this time regarding the USD vulnerability.
Best wishes,
CIGA Cyndi
Cyndi,
Jim Sinclair’s Commentary
Public-employee pensions face a rollback in Calif CIGA Eric
Pension of public employees have long been considered untouchable. Deteriorating local, state, and federal financials have politicians with increasing support of the private sector saying no more.
Any move that curtails public pensions carries consequences. The public sector, a large employer of the US civilian workforce, could very well be faced with a sharp reduction in their current and future standard of livings via a public vote. This will not only curtail economic growth in a predominantly consumption-driven economy but also could further polarize the nation into social and political extremes.
Headline: Public-employee pensions face a rollback in Calif
SAN DIEGO (AP) — For years, companies have been chipping away at workers’ pensions. Now, two California cities may help pave the way for governments to follow suit. Voters in San Diego and San Jose, the nation’s eighth- and 10th-largest cities, overwhelmingly approved ballot measures last week to roll back municipal retirement benefits — and not just for future hires but for current employees. From coast to coast, the pensions of current public employees have long been generally considered untouchable. But now, some politicians are saying those obligations are trumped by the need to provide for the public’s health and safety. The two California cases could put that argument to the test in a legal battle that could resonate in cash-strapped state capitols and city halls across the country. Lawsuits have already been filed in both cities. "Other states are going to have to pay attention," said Amy Monahan, a law professor at University of Minnesota. The court battles are playing out as lawmakers across the U.S. grapple with ballooning pension obligations that increasingly threaten schools, police, health clinics and other basic services. State and local governments may have $3 trillion in unfunded pension liabilities, and seven states and six large cities will be unable to cover their obligations beyond 2020, Northwestern University finance professor Joshua Rauh estimated last year.
Source: news.yahoo.com
More…
Jim,
Why aren’t we hearing more about this potential purchase to China? How would this affect JP Morgan Goldman and Barclays? If China controls the market would anything change?
Thanks,
CIGA Genny
Dear Genny,
ICE, HKEx seen likely to raise offers for LME By Susan Thomas and Veronica Brown
LONDON, June 6 (Reuters) – The two remaining suitors for the London Metal Exchange (LME) will resubmit proposals on Thursday and are likely to raise their bids in the final stages of a contest to buy the world’s biggest metals marketplace, sources close to the situation said.
The content of bids by InterContinental Exchange and Hong Kong Exchanges and Clearing are similar, the sources have told Reuters.
Both have pledged to keep the LME’s unique composition unchanged for now, including its warehousing network, complex prompt-date structure and open outcry trading. Trading on the LME sets global benchmark prices for six base metals.
That has increased the prospects the two bidders will be asked to refine the proposals, which sources have said are already around 1.2 billion pounds ($1.84 billion).
More…
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By Nick Squires, The Telegraph:
In the latest twist in a scandal which has convulsed the papacy of
Benedict XVI, Mr Tedeschi reportedly gave copies of the documents to his
closest confidantes and told them: “If I am killed, the reason for my
death is in here. I’ve seen things in the Vatican that would frighten
anyone.”One of the documents was reportedly titled “internal enemies” and contained the names of senior clergy and powerful Italian politicians.
Other emails and letters related to “money of dubious provenance” being allegedly funneled through the Vatican bank, according to Corriere della Sera.
Appointed in 2009, the 67-year-old banker was sacked as head of the Vatican’s bank on May 24 – the day after the Pope’s butler was arrested on suspicion of stealing confidential letters from Benedict’s desk and leaking them to journalists.
Mr Gotti Tedeschi was allegedly ousted by Cardinal Tarcisio Bertone, who as the Vatican secretary of state is the Pope’s deputy, in a dispute over efforts to improve the transparency of the scandal-ridden bank, known formally as the Institute for Religious Works.
Read More @ Telegraph.co.uk
The CBO Sees the Economic Cliff Ahead Posted on June 11, 2012 by Admin
Last week the Congressional Budget Office (CBO) issued its annual long-term budget outlook report, and the 2012 numbers are not promising. In fact, the CBO estimates that federal debt will rise to 70% of GDP by the end of the year– the highest percentage since World War II. The report also paints a stark picture of entitlement spending, as retiring Baby Boomers will cause government spending on health care, Social Security, and Medicare to explode as a percentage of GDP in coming years.
While the mainstream media correctly characterized the CBO report as highly pessimistic, they also ignored longstanding errors of methodology in CBO estimates. And those errors tend to support arguments for higher taxes and government spending, when in fact America needs exactly the opposite.
As Paul Roderick Gregory explained in a recent Forbes column, CBO has always applied wrongheaded assumptions inherent in Keynesian economics when forecasting future deficits – no matter how many times both history and economic theory have proven such assumptions incorrect. In particular, CBO seems wedded to two enduring Keynesian myths: First, that higher taxes necessarily increase federal revenue and have no negative effect on the economy; and second, that lower government spending hurts the economy. Neither is true, of course.
CBO also fails to factor in unexpected wars and expensive foreign entanglements, and we should not assign too much validity to predictive models based on peace. Judging from the actions and rhetoric coming from both parties in Washington, new military entanglements in Syria and Iran may well spike military spending in coming years.
Despite these sobering budget realities, the CBO report suggests that a solution is possible with merely a few minor adjustments in the way Congress handles economic issues. But what we need are not minor adjustments, but rather a fundamental shift in our philosophy of government. If we could come to our senses about the proper role of government in America, and what level of government interference is appropriate in a free economy, we would quickly find that there is no reason for government to spend so much, borrow so much, and tax so much.
More…
Jim Sinclair’s Commentary
You have to love how the people who gave the highest rating to junk
OTC real estate instruments now pours gas on the fire almost daily.
Are they born again, or are they working for the man?
Fitch downgrades Spain’s Banco Santander and Banco Bilbao
Fitch credit ratings agency has downgraded Spain’s two largest international banks Banco Santander and Banco Bilbao Vizcaya Argentaria (BBVA) from A to triple B plus.
The international credit agency said on Monday that the downgrades were primarily because Spanish sovereign debt ratings had been downgraded to BBB- from A- on June 7 and also due to forecasts that Spain’s faltering economy would remain in recession throughout this year and also in 2013.
The downgrades "reflect similar concerns to those that have affected the Spanish sovereign rating, in particular, that Spain is forecasted to remain in recession through the remainder of this year and 2013 compared to the previous expectation that the economy would benefit from a mild recovery," Fitch said in a statement.
The move comes just two days after eurozone finance ministers agreed to help Spain’s troubled banking sector with a 100 billion euros loan.
On Thursday, Fitch downgraded Spain’s long-term foreign and local currency rating by three notches citing the country’s banking crisis, mushrooming debt and recession as the main reasons for the downgrade.
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Jim Sinclair’s Commentary
This is classical definition of debt monetization, which is what makes up QE. It never stopped.
As foreign buying per the TIC report and US need rises, the Fed will be the primary buyer well into the future.
Top Customer: Under Obama, Fed’s Holdings of U.S. Debt Have Jumped 452% By Terence P. Jeffrey
June 7, 2012
(CNSNews.com) - Since President Barack Obama was inaugurated in January 2009, the Federal Reserve’s holdings of U.S. government debt have quintupled, according to the Fed’s official monthly balance sheet.
On Jan. 28, 2009, a week after Obama’s nomination, the Fed owned $302 billion in U.S. Treasury securities. On April 25, 2012, the latest date reported, the Fed owned five and a half time that much in U.S. Treasury securities–$1.668 trillion.
That is an increase from January 2009 of $1.366 trillion—or 452 percent.
Under Obama, the Federal Reserve has become the single largest owner of U.S. government debt. When Obama entered office, entities in the People’s Republic of China were the largest holders, followed by entities in Japan. At the end of January 2009, China owned $739.6 billion in U.S. government debt and Japan owned $634.8 billion.
By the end of March 2012, China’s holdings of U.S. debt had grown to $1.1699 trillion and Japan’s holdings had grown to $1.083 trillion.
Together, the Federal Reserve, China and Japan had increased their holdings of U.S. debt by $2.2445 trillion since Obama took office.
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Jim Sinclair’s Commentary
The EU has more like 3 weeks, not three months. This is why
manipulators died Sunday evening in the US when gold was plus $17 in
Asia as it should have been.
It gave away the urgency of the problem.
Greece will run out of money in ‘a few weeks’ says former Prime Minister George Papandreou Posted on 12 June 2012
After the Spanish banking bailout drama the action now swings back to Greece for the election this weekend. Former Prime Minister George Papandreou tells Bloomberg TV’s Sara Eisen that Greece has ‘a few weeks’ before its government runs out of money and that this is a ‘make or break’ period.
What a classic understatement: Greece is going down and wants to pull the whole global financial system down with it. In short, the message is save us or you destroy your system. It is this sort of blackmail and subterfuge that has gotten Greece into such a horrendous mess.
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Jim Sinclair’s Commentary
Euroland has 3 weeks, not 3 months.
Worry for Italy Quickly Replaces Relief for Spain By LIZ ALDERMAN and ELISABETTA POVOLEDO
VENICE — Concerns grew on Monday that Italy could be the next victim of Europe’s financial infection, leading nervous investors to sell Italian stocks and bonds and damping euphoria over a weekend deal to bail out Spain’s banks.
Italian officials privately expressed concern that the 100 billion euros, or $125 billion, that Europe pledged to Spanish banks might not stop the troubles from spreading.
Italy’s main stock index was Europe’s worst performer on Monday, a day when United States stocks were also dragged down and investors flocked yet again to the safe harbor of American and German government bonds. Even the Italian prime minister, Mario Monti, a European technocrat who came to office after the euro crisis forced out Silvio Berlusconi last November, has begun to acknowledge the dangers posed to his country’s 1.56-trillion-euro economy ($1.95 trillion).
The main fear is that Italy cannot grow its way out of a recession fast enough to pay a mountainous national debt. Other concerns include the fact that Italy, with the third-largest euro zone economy after those of Germany and France, will have to shoulder a large portion of the bailout bill even as it grapples with its own sharp economic downturn.
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Jim Sinclair’s Commentary
The euro has more like 3 weeks, not 3 months.
QE to infinity is as sure as death and taxes. Operation Twist is a total joke as it relates to accommodation.
Right now as a whole is a sick joke.
Italian 10 year yields have pushed higher after the outside day. We are above the reverse head and shoulders neckline at 6.03% and a close above would confirm this break suggesting a move to the Nov 2011 highs again. Worse still we see a bear flattening of the Italian 2’s versus 10’s curve today, reflecting a more urgent concern in Italian Fixed Income markets.
Italian Equities also remain under pressure after yesterday’s bearish daily reversal and the European Banks Index also looks weak as it fails to sustain above good resistance levels.
Jim,
Care to comment?
Turkish people can pay in gold in certain foreign exchange houses and most jewellers will accept gold as payment. Turkish banks are is now offering digital gold saving accounts.
Turkey expanded its gold reserves by 29.7 metric tons in April. Turkey’s bullion reserves climbed to 239.3 tons last month meaning that Turkey increased their gold reserves by 14% in April.
The central bank on March 27 doubled the share of lira reserves banks can hold in gold to 20%, saying it would provide 6.1 billion liras ($3.3 billion) of extra liquidity.
"This addition," the WGC says, "was the result of a policy change under which the central bank will now accept gold in reserve requirements from commercial banks to help the banks utilize their gold in managing their liquidity."
CIGA Derek A
Dear Derek,
I have commented on this trend whereby gold is moving towards, and not away from the monetary system.
Regards,
Jim
Jim
Gold Deposits Of USD 1 Billion To Be Collected By Turkish Bank Published in Market Update Precious Metals Update on 12 June 2012
Today’s AM fix was USD 1,589.25, EUR 1,271.40, and GBP 1,025.65 per ounce.
Yesterday’s AM fix was USD 1,593.00, EUR 1,264.79, and GBP 1,023.45 per ounce.
Silver is trading at $28.67/oz, €22.92/oz and £18.52/oz. Platinum is trading at $1,448.00/oz, palladium at $618.00/oz and rhodium at $1,200/oz.
Gold 1 Month Chart – (Bloomberg)Gold climbed $5.60 or 0.35% yesterday in New York and closed at $1,600.20/oz despite stock markets giving up early gains on misguided optimism regarding the Spanish “bailout”.
Gold fell initially in Asia before trading sideways and this range trading has continued in European trading.
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Hi Jim,
An update on the front page of the FT online declares: ‘Hong Kong Urged To Review Dollar Peg’.
Looks like you are right again – this time regarding the USD vulnerability.
Best wishes,
CIGA Cyndi
Cyndi,
This June may well be remembered as the month it all ended.
The end is here, not near. The drama must play itself out but there is no going backwards to better times.
The dollar is a mirror image of the euro. The euro will be resolved one way or another. Then the dollar enters a collapse phase.
Regards,
Jim
Jim
Jim Sinclair’s Commentary
The most endangered species in the Western world is on two feet. It is the pensioner without a paid off hobby farm.
Public-employee pensions face a rollback in Calif CIGA Eric
Pension of public employees have long been considered untouchable. Deteriorating local, state, and federal financials have politicians with increasing support of the private sector saying no more.
Any move that curtails public pensions carries consequences. The public sector, a large employer of the US civilian workforce, could very well be faced with a sharp reduction in their current and future standard of livings via a public vote. This will not only curtail economic growth in a predominantly consumption-driven economy but also could further polarize the nation into social and political extremes.
Headline: Public-employee pensions face a rollback in Calif
SAN DIEGO (AP) — For years, companies have been chipping away at workers’ pensions. Now, two California cities may help pave the way for governments to follow suit. Voters in San Diego and San Jose, the nation’s eighth- and 10th-largest cities, overwhelmingly approved ballot measures last week to roll back municipal retirement benefits — and not just for future hires but for current employees. From coast to coast, the pensions of current public employees have long been generally considered untouchable. But now, some politicians are saying those obligations are trumped by the need to provide for the public’s health and safety. The two California cases could put that argument to the test in a legal battle that could resonate in cash-strapped state capitols and city halls across the country. Lawsuits have already been filed in both cities. "Other states are going to have to pay attention," said Amy Monahan, a law professor at University of Minnesota. The court battles are playing out as lawmakers across the U.S. grapple with ballooning pension obligations that increasingly threaten schools, police, health clinics and other basic services. State and local governments may have $3 trillion in unfunded pension liabilities, and seven states and six large cities will be unable to cover their obligations beyond 2020, Northwestern University finance professor Joshua Rauh estimated last year.
Source: news.yahoo.com
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Jim,
Why aren’t we hearing more about this potential purchase to China? How would this affect JP Morgan Goldman and Barclays? If China controls the market would anything change?
Thanks,
CIGA Genny
Dear Genny,
You really think the "good old boys" will allow this to happen?
Jim
ICE, HKEx seen likely to raise offers for LME By Susan Thomas and Veronica Brown
LONDON, June 6 (Reuters) – The two remaining suitors for the London Metal Exchange (LME) will resubmit proposals on Thursday and are likely to raise their bids in the final stages of a contest to buy the world’s biggest metals marketplace, sources close to the situation said.
The content of bids by InterContinental Exchange and Hong Kong Exchanges and Clearing are similar, the sources have told Reuters.
Both have pledged to keep the LME’s unique composition unchanged for now, including its warehousing network, complex prompt-date structure and open outcry trading. Trading on the LME sets global benchmark prices for six base metals.
That has increased the prospects the two bidders will be asked to refine the proposals, which sources have said are already around 1.2 billion pounds ($1.84 billion).
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