by Patrick A. Heller, CoinWeek.com:
A number of so-called experts
are proclaiming that gold’s price is in a bubble that has burst.
However, actual market activity signals that demand for physical gold is
draining available supplies.
In the first five months of 2012, at least 315 tons (10.1 million ounces) of gold had been imported into China. This quantity exceeds one-third of all global newly mined supplies during that time. The actual quantity is almost certainly higher as the Chinese government has a habit of not reporting all of the gold it adds to its reserves until several years later.
Demand in China is so strong that its government is trying to establish new venues through which people can acquire gold. By the end of August, at least one new exchange is expected to open in that nation to allow citizens greater access.
Read More @ CoinWeek.com
BTFD...Keep Stacking...
A number of so-called experts
are proclaiming that gold’s price is in a bubble that has burst.
However, actual market activity signals that demand for physical gold is
draining available supplies.In the first five months of 2012, at least 315 tons (10.1 million ounces) of gold had been imported into China. This quantity exceeds one-third of all global newly mined supplies during that time. The actual quantity is almost certainly higher as the Chinese government has a habit of not reporting all of the gold it adds to its reserves until several years later.
Demand in China is so strong that its government is trying to establish new venues through which people can acquire gold. By the end of August, at least one new exchange is expected to open in that nation to allow citizens greater access.
Read More @ CoinWeek.com
BTFD...Keep Stacking...
from FinancialSurvivalNet:
Bron Suchecki, who’s in charge of strategy for the famed Perth Mint, is warning all precious metals investors that the next crisis will lead to heightened precious metals demand so expect shortages and mint rationing. This is exactly what happened in 2008, and the next crisis could very well be worse. Interestingly, the shortages emerged not from a shortage of raw materials, but due to a lack of fabrication capacity. The blanks or planchets that are required to stamp coins are in limited supply. There aren’t a lot of producers around the world, and they have been knwon to invest large amounts of capital towards ramping up production. This is due to the market’s unpredicatable demand curve and the high costs of expansion. The result is that the distribution system works great in times of regular demand, but it quickly breaks down when demand spikes.
There
are many channels through which changes in the monetary policy stance
are transmitted to the real economy. Recent statements by Draghi and
Noyer (and a dropped word by Nowotny) suggest that the ECB is concerned
about the uneven transmission of its July interest rate cut to bank
lending rates across the Euro area. Goldman finds this empirically
true, noting that the influence of official ECB rates on retail interest rates in Italy and Spain has diminished,
while it has increased in Germany and France and in fact there is a
‘reversal of policy transmission’ in Spain and Italy, whereby ECB rate
cuts are now associated with an increase, rather than a fall, in retail
rates (as the rapid deterioration in peripheral banking systems has
more than offset any impact of lower rates). This 'failure' of standard monetary policy to ease conditions has led to the non-standard measures being discussed now. We see three points from this: rate cuts are less likely than the market believes;
while SMP is now being priced in, it doesn't specifically address the
transmission-mechanism; and just as Draghi hinted at in his last
conference, we suspect he will reiterate his reduced collateral standards and increased eligibility to private-sector loans directly (an LTRO 2.5) - which, however, will necessarily encumber bank balance sheets even more (if Zee Germans will even agree to it).
Bron Suchecki, who’s in charge of strategy for the famed Perth Mint, is warning all precious metals investors that the next crisis will lead to heightened precious metals demand so expect shortages and mint rationing. This is exactly what happened in 2008, and the next crisis could very well be worse. Interestingly, the shortages emerged not from a shortage of raw materials, but due to a lack of fabrication capacity. The blanks or planchets that are required to stamp coins are in limited supply. There aren’t a lot of producers around the world, and they have been knwon to invest large amounts of capital towards ramping up production. This is due to the market’s unpredicatable demand curve and the high costs of expansion. The result is that the distribution system works great in times of regular demand, but it quickly breaks down when demand spikes.
On Europe's Broken Transmission Channels
There
are many channels through which changes in the monetary policy stance
are transmitted to the real economy. Recent statements by Draghi and
Noyer (and a dropped word by Nowotny) suggest that the ECB is concerned
about the uneven transmission of its July interest rate cut to bank
lending rates across the Euro area. Goldman finds this empirically
true, noting that the influence of official ECB rates on retail interest rates in Italy and Spain has diminished,
while it has increased in Germany and France and in fact there is a
‘reversal of policy transmission’ in Spain and Italy, whereby ECB rate
cuts are now associated with an increase, rather than a fall, in retail
rates (as the rapid deterioration in peripheral banking systems has
more than offset any impact of lower rates). This 'failure' of standard monetary policy to ease conditions has led to the non-standard measures being discussed now. We see three points from this: rate cuts are less likely than the market believes;
while SMP is now being priced in, it doesn't specifically address the
transmission-mechanism; and just as Draghi hinted at in his last
conference, we suspect he will reiterate his reduced collateral standards and increased eligibility to private-sector loans directly (an LTRO 2.5) - which, however, will necessarily encumber bank balance sheets even more (if Zee Germans will even agree to it).
from bstill3:
The Fed pretends to be part of the federal government to make us believe that it is controlling the banks. But now we know that there is nothing federal about the Fed, and the banks control it instead.
The Fed pretends to be part of the federal government to make us believe that it is controlling the banks. But now we know that there is nothing federal about the Fed, and the banks control it instead.
[Ed. Note:
When is a bank holiday not a bank holiday? When it is called a
"glitch". When your bank has a "glitch" like the ones that are currently
happening all over the globe, go inside the bank and demand YOUR money
-- and tell us what happens.]
by Richard Evans, The Telegraph:
NatWest has become the second financial institution to report technical problems with its systems today after up to 2m Nationwide transactions were duplicated.
NatWest said on its Twitter feed: “Some customers may have issues
with their online banking and using their debit cards at the moment.
Working as hard as we can to resolve. We’ll post updates as soon as we
have more information.”
Cash machine withdrawals using debit cards are also affected, the bank added.
Earlier in the summer the bank suffered a major systems collapse when millions of customers were unable to check their balances, withdraw cash or make payments. NatWest promised that no customers would be left out of pocket as a result of the technology problems.
Today customers of Nationwide, the country’s biggest building society, said around 704,000 customers were affected by an apparent technical problem with the mutual’s payment systems.
The building society confirmed that there was an “issue” with debits from accounts. It said on Twitter: “An issue with debit card transactions is affecting some customers. Sorry, accounts will be corrected.”
Read More @ Telegraph.co.uk
If you were hoping for a recession in 2012, then you are going to be
very happy with the numbers you are about to see. The U.S. economy is
heading downhill just in time for the 2012 election. Retail sales have
fallen for three months in a row for the first time since 2008,
manufacturing activity is dropping like a rock, sales of new homes are
declining again, consumer confidence has moved significantly lower and a
depressingly small percentage of businesses anticipate hiring more
workers in the coming months. Even though the Federal Reserve has been
wildly pumping money into the financial system and even though the
federal government has been injecting gigantic piles of borrowed cash
into the economy, we still haven’t seen an economic recovery. In fact,
we appear to be on the verge of yet another major downturn. In
California the other night, Barack Obama told supporters that “we tried our plan — and it worked“,
but only those that are still drinking the Obama kool-aid would believe
something so preposterous. The truth is that the U.S. economy has been
steadily declining for many years and now we have reached another very
painful recession.
Read More @ TheEconomicCollpaseBlog.com
Western bankers are using weapons of mass financial destruction as the world is entering into global recession and depression, a financial analyst tells Press TV.
by Richard Evans, The Telegraph:
NatWest has become the second financial institution to report technical problems with its systems today after up to 2m Nationwide transactions were duplicated.
NatWest said on its Twitter feed: “Some customers may have issues
with their online banking and using their debit cards at the moment.
Working as hard as we can to resolve. We’ll post updates as soon as we
have more information.”Cash machine withdrawals using debit cards are also affected, the bank added.
Earlier in the summer the bank suffered a major systems collapse when millions of customers were unable to check their balances, withdraw cash or make payments. NatWest promised that no customers would be left out of pocket as a result of the technology problems.
Today customers of Nationwide, the country’s biggest building society, said around 704,000 customers were affected by an apparent technical problem with the mutual’s payment systems.
The building society confirmed that there was an “issue” with debits from accounts. It said on Twitter: “An issue with debit card transactions is affecting some customers. Sorry, accounts will be corrected.”
Read More @ Telegraph.co.uk
If you were hoping for a recession in 2012, then you are going to be
very happy with the numbers you are about to see. The U.S. economy is
heading downhill just in time for the 2012 election. Retail sales have
fallen for three months in a row for the first time since 2008,
manufacturing activity is dropping like a rock, sales of new homes are
declining again, consumer confidence has moved significantly lower and a
depressingly small percentage of businesses anticipate hiring more
workers in the coming months. Even though the Federal Reserve has been
wildly pumping money into the financial system and even though the
federal government has been injecting gigantic piles of borrowed cash
into the economy, we still haven’t seen an economic recovery. In fact,
we appear to be on the verge of yet another major downturn. In
California the other night, Barack Obama told supporters that “we tried our plan — and it worked“,
but only those that are still drinking the Obama kool-aid would believe
something so preposterous. The truth is that the U.S. economy has been
steadily declining for many years and now we have reached another very
painful recession.Read More @ TheEconomicCollpaseBlog.com
from MaxKeiserTV:
Western bankers are using weapons of mass financial destruction as the world is entering into global recession and depression, a financial analyst tells Press TV.
by Greg Hunter, USAWatchdog:
Could the credit crisis we face globally destroy civilization as we
know it? Richard Duncan, author of a new book called, “The New
Depression: The breakdown in paper money,” says yes! Duncan claims the
$50 trillion in credit expansion in the last 40 years must continue or
the system will basically fall into complete chaos. In an appearance on
the European version of CNBC last week, Duncan said, “If this credit
bubble pops, the depression is going to be so severe, I honestly don’t
think our civilization could survive it.” My question is why doesn’t
CNBC have this guy on in the U.S.? Maybe the possible scenario he is
talking about is just too scary and really bad for selling stocks? Who
knows, but it is well worth a listen and something you should know
about. Please enjoy the video and discussion.
Read More @ USAWatchdog.com
Could the credit crisis we face globally destroy civilization as we
know it? Richard Duncan, author of a new book called, “The New
Depression: The breakdown in paper money,” says yes! Duncan claims the
$50 trillion in credit expansion in the last 40 years must continue or
the system will basically fall into complete chaos. In an appearance on
the European version of CNBC last week, Duncan said, “If this credit
bubble pops, the depression is going to be so severe, I honestly don’t
think our civilization could survive it.” My question is why doesn’t
CNBC have this guy on in the U.S.? Maybe the possible scenario he is
talking about is just too scary and really bad for selling stocks? Who
knows, but it is well worth a listen and something you should know
about. Please enjoy the video and discussion.Read More @ USAWatchdog.com
by Angel Clark & Anon Patriot, Freedoms Phoenix :
Supporters of Rep. Ron Paul and sound monetary policy rejoiced online
as they heard of the passage of H.R. 456, the Federal Transparency Act,
on Wednesday. Their joy, however, was short-lived as within an
hour of the bill passing word spread from the office of the Harry Reid.
The Senate Majority Leader and Nevada Democrat has vowed the Federal
Transparency Act will not be put to a vote in the Senate.
Harry Reid had previously expressed support for an audit of the Federal Reserve. Perhaps seeing the overwhelming support the H.R. 459 received in the House of Representatives made Reid wary of the Federal Transparency Act passing. H.R. 459 passed by a bipartisan vote of 327-98. But Harry Reid doesn’t care what the people want – HE wants to kill it.
BUT YOU CAN DO SOMETHING: Read More…
Supporters of Rep. Ron Paul and sound monetary policy rejoiced online
as they heard of the passage of H.R. 456, the Federal Transparency Act,
on Wednesday. Their joy, however, was short-lived as within an
hour of the bill passing word spread from the office of the Harry Reid.
The Senate Majority Leader and Nevada Democrat has vowed the Federal
Transparency Act will not be put to a vote in the Senate.Harry Reid had previously expressed support for an audit of the Federal Reserve. Perhaps seeing the overwhelming support the H.R. 459 received in the House of Representatives made Reid wary of the Federal Transparency Act passing. H.R. 459 passed by a bipartisan vote of 327-98. But Harry Reid doesn’t care what the people want – HE wants to kill it.
BUT YOU CAN DO SOMETHING: Read More…
from BenSwannRealityCheck:
Ben Swann Reality Check takes a look at Senate Majority Leader Harry Reid’s past support of auditing the Federal Reserve and why he is now saying he won’t allow an up or down vote on the bill.
Ben Swann Reality Check takes a look at Senate Majority Leader Harry Reid’s past support of auditing the Federal Reserve and why he is now saying he won’t allow an up or down vote on the bill.
by Ron Paul, Lew Rockwell:
Before the United States House of Representatives, Committee on Financial Services, Hearing on the Annual Report of the Financial Stability Oversight Council, July 25, 2012
Mr. Chairman, I welcome this hearing to receive the report of the
Financial Stability Oversight Council (FSOC). The creation of FSOC
underscores perfectly the complete intellectual bankruptcy underpinning
the government’s behavior towards financial markets. In the opinion of
government leaders, the financial crisis was not caused by misguided
regulation, interest rate manipulation, or government-caused distortions
to the structure of production, but by a financial sector that was
completely deregulated and laissez-faire. The response of legislators,
therefore, was to create a new super-regulator with vast new powers to
control the financial system.
Those who truly believe that the financial sector is deregulated might want to test their hypothesis by starting their own bank without the government’s imprimatur, assuming that they are prepared to spend some time in a federal penitentiary. To say that the financial sector is deregulated could not be further from the truth. No other sector of the economy is as intertwined with the government as the financial industry.
Read More @ LewRockwell.com
Before the United States House of Representatives, Committee on Financial Services, Hearing on the Annual Report of the Financial Stability Oversight Council, July 25, 2012
Mr. Chairman, I welcome this hearing to receive the report of the
Financial Stability Oversight Council (FSOC). The creation of FSOC
underscores perfectly the complete intellectual bankruptcy underpinning
the government’s behavior towards financial markets. In the opinion of
government leaders, the financial crisis was not caused by misguided
regulation, interest rate manipulation, or government-caused distortions
to the structure of production, but by a financial sector that was
completely deregulated and laissez-faire. The response of legislators,
therefore, was to create a new super-regulator with vast new powers to
control the financial system.Those who truly believe that the financial sector is deregulated might want to test their hypothesis by starting their own bank without the government’s imprimatur, assuming that they are prepared to spend some time in a federal penitentiary. To say that the financial sector is deregulated could not be further from the truth. No other sector of the economy is as intertwined with the government as the financial industry.
Read More @ LewRockwell.com
by Tim Price, Sovereign Man :
London, England
For the last two weeks here in the UK, TV stations have been running a documentary series called “Bank of Dave“, in which down-to-earth businessman Dave Fishwick attempts to establish his own bank.
The premise sounds plausible: offer depositors 5% interest (as opposed to zero), and lend to credible small businesses that are otherwise ignored by the majors.
But as the irrepressible Dave soon discovers, getting a new banking licence in the UK isn’t easy.
‘Bank of Dave’ has obviously been, albeit inadvertently, deliciously well-timed, arriving on television and computer screens accompanied by increasingly shrill coverage of interest rate rigging in the LIBOR manipulation scandal.
Read More @ SovereignMan.com
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London, EnglandFor the last two weeks here in the UK, TV stations have been running a documentary series called “Bank of Dave“, in which down-to-earth businessman Dave Fishwick attempts to establish his own bank.
The premise sounds plausible: offer depositors 5% interest (as opposed to zero), and lend to credible small businesses that are otherwise ignored by the majors.
But as the irrepressible Dave soon discovers, getting a new banking licence in the UK isn’t easy.
‘Bank of Dave’ has obviously been, albeit inadvertently, deliciously well-timed, arriving on television and computer screens accompanied by increasingly shrill coverage of interest rate rigging in the LIBOR manipulation scandal.
Read More @ SovereignMan.com
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by Michael Krieger, Liberty Blitzkreig
The thing that I disdain more than anything else with regard to the
government bureaucrats and Central Planners, is the inexplicable and
unjustified confidence they have in their abilities. As much as I bash
Wall Street, I would rather have a good investor (not a crony,
government welfare baby investor like Warren Buffett, but a legitimate
one), in a leadership position rather than the lifetime academics and
politicians (lawyers) that are running things today. Why? Because
anyone that has worked in the real world of investing has made so many
mistakes it is impossible to count. I want to make clear that none of
this applies to the TBTF banks, which absolutely couldn’t make a dime
without government handouts and bailouts, or the buy-side firms that are
in bed with the government (you know who you are), but legitimate “eat
what you kill” investors and traders that have no help and must be right
more than wrong to survive. These folks are consistently humbled, week
after week and year after year by the market and forces beyond their
control. They are constantly reminded that failure is just around the
corner. In many cases, folks do fail and then they have to pick
themselves up off the ground, shake away the dirt and fight to win
another day. This of course doesn’t merely apply to investors and
traders, but to all those out there in the private workforce trying to
create a new business, climb the ladder from line cook to store manager
at McDonalds or Wal-Mart, or those spending hours upon hours in a garage
or lab trying to discover the next game changing invention.
Read More @ LibertyBlitzkreig.com
The thing that I disdain more than anything else with regard to the
government bureaucrats and Central Planners, is the inexplicable and
unjustified confidence they have in their abilities. As much as I bash
Wall Street, I would rather have a good investor (not a crony,
government welfare baby investor like Warren Buffett, but a legitimate
one), in a leadership position rather than the lifetime academics and
politicians (lawyers) that are running things today. Why? Because
anyone that has worked in the real world of investing has made so many
mistakes it is impossible to count. I want to make clear that none of
this applies to the TBTF banks, which absolutely couldn’t make a dime
without government handouts and bailouts, or the buy-side firms that are
in bed with the government (you know who you are), but legitimate “eat
what you kill” investors and traders that have no help and must be right
more than wrong to survive. These folks are consistently humbled, week
after week and year after year by the market and forces beyond their
control. They are constantly reminded that failure is just around the
corner. In many cases, folks do fail and then they have to pick
themselves up off the ground, shake away the dirt and fight to win
another day. This of course doesn’t merely apply to investors and
traders, but to all those out there in the private workforce trying to
create a new business, climb the ladder from line cook to store manager
at McDonalds or Wal-Mart, or those spending hours upon hours in a garage
or lab trying to discover the next game changing invention. Read More @ LibertyBlitzkreig.com
by Russia Today:
The TSA, DHS and countless other security agencies have been
established to keep America safe from terrorist attacks in post-9/11
America. How far beyond that does the feds’ reach really go, though?
The attacks September 11, 2001, were instrumental in enabling the US government to establish counterterrorism agencies to prevent future tragedies. Some officials say that they haven’t stopped there, though, and are spying on everyone in America — all in the name of national security.
Testimonies delivered in recent weeks by former employees of the National Security Agency suggest that the US government is granting itself surveillance powers far beyond what most Americans consider the proper role of the federal government.
Read More @ RT.com
The desire of gold is not for gold. It is for the means of freedom and benefit. –Ralph Waldo Emerson
Jim Sinclair’s Commentary
Pending Sales of U.S. Homes Unexpectedly Fell 1.4% in June Michelle Jamrisko – Jul 26, 2012 7:14 AM MT
Contracts to purchase previously owned homes unexpectedly dropped in June for the second time in the last three months, a sign of limited momentum in housing.
The index of pending home resales decreased 1.4 percent to 99.3 after a revised 5.4 percent gain in May that was less than initially reported, figures from the National Association of Realtors showed today in Washington. The median forecast of economists surveyed by Bloomberg News called for a 0.3 percent June increase.
Slower job growth that’s holding down confidence and strict lending standards are restraining housing even with cheaper properties and mortgage rates at all-time lows. While acknowledging the improvement in housing, Federal Reserve Chairman Ben S. Bernanke said last week that policy makers are ready to take further action to boost an economy that faces a headwind from Europe’s debt crisis.
“One of the cruel facts of this current backdrop is that few people have really been able to take advantage of these historically low rates — whether that’s by choice or force,” Tom Porcelli, chief U.S. economist for RBC Capital Markets LLC in New York, said before the report. “You really haven’t seen purchase applications pick up in any meaningful way at this stage.”
Estimates in the Bloomberg survey of 34 economists ranged from a drop of 4 percent to a gain of 4 percent.
More…
Jim Sinclair’s Commentary
Foreclosure Filings Increase in 60% of Large U.S. Cities By Dan Levy – Jul 25, 2012 9:01 PM MT
Foreclosure filings rose in almost 60 percent of large U.S. cities in the first half of 2012, indicating many areas will have more distressed homes on the market later this year, RealtyTrac Inc. reported.
More than 1 million homes in metropolitan areas with populations of at least 200,000 received notices of default, auction or repossession, up 1.5 percent from the last six months of 2011, the Irvine, California-based data provider said today in a statement. Among the 20 largest markets, Tampa, Florida; Philadelphia; Chicago and New York City had the biggest percentage increases in filings.
The gain in foreclosure actions followed a probe into abusive lender practices that delayed bank seizures nationwide. More repossessions will buoy deals “in many local markets where a shortage of aggressively priced inventory has been holding up sales,” RealtyTrac Chief Executive Officer Brandon Moore said in the statement.
A $25 billion bank settlement announced Feb. 9 eased loan terms for some borrowers and set new guidelines for the five largest U.S. mortgage providers. Recent laws passed in Nevada and California, meanwhile, have made it harder for loan servicers to resume property seizures, Daren Blomquist, a RealtyTrac spokesman, said in a telephone interview.
The new regulations have been “a clock-stopper on lenders and led to more artificial decreases,” he said. Throughout the U.S., first-half filings, while up from the previous six months, were down almost 11 percent from a year earlier, RealtyTrac said.
More…
Jim Sinclair’s Commentary
Here is the latest from John Williams’ www.ShadowStats.com.
- Durable Goods Orders in Second Straight Quarterly Contraction
- Household Income Still Bottom-Bouncing
- June Home Sales Fall-Off, Quarterly Growth Slows/Contracts
"No. 458: June Durable Goods Orders, Home Sales, Household Income"
Web-page: http://www.shadowstats.com
Aden Sisters Forecast – Bubble Phase In Gold To Begin In 2013 And Possibly Reach? gold-speculator.com
JULY 26, 2012
Gold has been moving within a mega upchannel since 1970 and still has a ways to go before reaching the top side of this mega uptrend. How high is anyone’s guess but*were gold’s price rise to match the 2300% rise realized in the 1970s (and our research suggests we could see the start of the bubble phase by next year) we’d see a $6000 gold price, which would blow the gold price well above the mega upchannel. [Let us explain our conclusions with the use of 2 charts.
So say Mary Anne and Pamela Aden (Www.adenforecast.com)
The Adens go on to say, in part:
If gold breaks above $1650 and stays there, the worst will be behind us. Then $1700, $1800 and $1900 will be the next stepping stones in the renewed rise. Record high territory would confirm the making of a strong leg upward.
How High?
How high is anyone’s guess. It all depends on the explosive stage in the bull market. That phase is still to come and Chart 1 provides a good example of this.
As you can see, gold has been moving within a mega upchannel since 1970. The gold rise since 2001 still has a ways to go before reaching the top side of this mega uptrend.
Note on the top chart that gold moved into the upper side of the mega channel when it burst into record territory in September 2009. This was just six months after QE first started in March 2009.
When gold reached the $1900 record level last September, the leading indicator (below) rose to the normal high area and it’s been declining since then, now approaching the uptrend and zero line.
More…
Congressman Ron Paul on Bloomberg News – July 25 2012
Jim Sinclair’s Commentary
Still Think That Money Market Fund Is “Cash”? by JOHN RUBINO on JULY 21, 2012
When investors decide to close out their riskier positions and move into “cash”, they don’t actually go to the bank and get a stack of twenties. Most just sell their stocks and let their broker sweep the proceeds into a money market fund which, they assume, is the same thing as cash because it holds high-quality short-term commercial paper that almost never defaults.
That pleasant assumption breaks down as soon as you look at a typical money market fund’s holdings and see that it owns, among other disturbing things, a lot of European bank debt.
But at least you can get your money out with a mouse click, right?
Well, maybe not. Apparently the Fed, cognizant of the potential weakness of the money fund system, is considering withdrawal limits:
Fed Eyes Limiting Money-Market Fund Withdrawals
NEW YORK–The Federal Reserve Bank of New York said it supports limiting some types of money-market fund withdrawals in a bid to protect those funds from suffering the equivalent of a bank run.
The recommendations came from a staff report released Thursday. New York Fed President William Dudley in a press release accompanying the document said he “strongly” endorses the ideas put forth by authors Patrick McCabe, Marco Cipriani, Michael Holscher and Antoine Martin.
“Further reform of money funds is essential for our nation’s financial stability,” Mr. Dudley said.
More…
Jim Sinclair’s Commentary
Breaking Up Banks Won’t Make Them Safer, Ex-Senator Says By Christine Harper – Jul 25, 2012 10:00 PM MT
Phil Gramm, the former U.S. senator who helped write the 1999 law that enabled the creation of financial giants such as Citigroup Inc. (C) and Bank of America Corp., said his legislation didn’t make the system any riskier.
The Gramm-Leach-Bliley Act repealed the 1933 prohibition against federally insured depository institutions combining with securities firms and insurers. While his law allows deposit- taking banks to affiliate with securities firms through holding companies, depositors and taxpayers are protected because affiliates can’t take capital out of the banks, Gramm said in a telephone interview yesterday.
“I don’t see any evidence that allowing them to affiliate through holding companies had anything to do with the financial crisis nor has anybody ever presented any evidence to suggest that it did,” said Gramm, 70. Companies that failed such as Lehman Brothers Holdings Inc. “tended to be narrowly focused.”
Sanford “Sandy” Weill, who created Citigroup and pushed for the Gramm-Leach-Bliley Act, said yesterday on CNBC that he would now support dismantling financial holding companies.
“What we should probably do is go and split up investment banking from banking,” Weill, 79, said in the interview. “Have banks do something that’s not going to risk the taxpayer dollars, that’s not going to be too big to fail.”
More…
Jim Sinclair’s Commentary
Mexico Hits HSBC with $28 Million Fine in Laundering Case Published July 25, 2012
MEXICO CITY – Mexico slammed banking giant HSBC with a $28 million fine for failing to prevent money laundering through accounts at the bank.
Mexico’s National Securities and Banking Commission said Wednesday that HSBC has paid the fines, equivalent to 379 million pesos, or about half of the subsidiary’s 2011 annual profits.
The commission, and a report by a U.S. senate investigative committee, found the bank failed to control suspicious flows of billions of dollars through its accounts and didn’t respond promptly after being warned about a huge swell in dollar cash transactions at the bank.
Guillermo Babatz, president of the banking commission, said that at its peak in the mid-2000s, HSBC had become the main shipper of dollar cash transfers from Mexico to the United States, accounting for about half of the total flow, even though it wasn’t then among the country’s largest banks.
Babatz said that regulators detected the swell of suspicious transactions and warned local management in 2007 and 2008, but got little response. He said regulators then took the unusual step of contacting top management of the bank’s central offices. "When we contacted the head offices, it was because we were very worried and didn’t get a response" from local management, who he said "minimized the risks."
More…
Jim Sinclair’s Commentary
Nomura CEO quits as insider trading scandal widens By Emi Emoto and Nathan Layne
TOKYO | Thu Jul 26, 2012 8:16am EDT
(Reuters) – Nomura Holdings Inc (8604.T) CEO Kenichi Watanabe resigned on Thursday over a widening insider trading scandal and will be replaced by company veteran Koji Nagai, as Japan’s top investment bank warned additional cases could come to light.
The management shake-up was confirmed in a news conference at the end of a dramatic day in Tokyo that also saw Watanabe’s top lieutenant, Takumi Shibata, resign over leaks of insider information to clients of its securities unit in 2010.
Watanabe is the second global bank boss to resign this month – Barclays (BARC.L) chief Bob Diamond stood down over the Libor rate-rigging scandal on July 3 – as the industry finds itself under huge political and regulatory pressure.
The departure of Watanabe and Shibata, the architects of Nomura’s takeover of the Asian and European assets of Lehman Brothers, raises questions about the future of the global expansion strategy they pursued.
Nagai, a three-decade company veteran who took over as head of the Nomura’s domestic securities unit in April as part of a management reshuffle, said he would map out a "new global strategy". He said he had no intention of dropping Nomura’s ambition of being a global investment bank centered in Asia, but suggested he may pursue further restructuring overseas.
More…
Jim Sinclair’s Commentary
Draghi Says ECB Will Do What’s Needed To Preserve Euro: Economy By Jeff Black and Jana Randow – Jul 26, 2012 9:50 AM ET
European Central Bank President “To the extent that the size of these sovereign premia hamper the functioning of the monetary policy transmission channel, they come within our mandate,” Draghi said in a speech at the Global Investment Conference in London today. “Within our mandate, the ECB is ready to do whatever it takes to preserve the euro,” he said, adding: “believe me, it will be enough.”
Financial markets surged on speculation the ECB will act to lower Spanish borrowing costs after yields on the nation’s bonds rose to levels that prompted bailouts for Greece,Portugal and Ireland. The ECB reluctantly started buying Spanish and Italian debt in August last year as part of its bond purchase program. The buying had little lasting effect and the ECB suspended the program in March.
“His comments certainly suggest that ECB purchases of Spanish and Italian bonds are back on the table for discussion,” said Chris Scicluna, head of economic research at Daiwa Capital Markets Europe. “But — just like last summer — we would expect any new ECB bond purchases to be temporary and limited until other policies are put in place.”
Mario Draghi said policy makers will do whatever is needed to preserve the euro, suggesting they may intervene in bond markets as surging yields in Spain and Italy threaten the existence of the 17-nation currency bloc.
More…
Dear Jim,
Here’s a way to keep track of the increasing number of municipal bankruptcies:
http://www.governing.com/gov-data/other/municipal-cities-counties-bankruptcies-and-defaults.html
Courtesy of: http://www.pensiontsunami.com/
Regards,
CIGA Tom
Eric,
Mailbox
CIGA Eric
Many of the world’s global citizens have already been forced into ‘survival mode’ by chronic unemployment, underemployment, and/or a general standard of living squeeze trigged by expenses rising faster than income for years. Survival mode will encompass a larger cross-section of the world’s developed nations as the financial crisis expands and intensifies in 2015. The distinction between who’s stupid or savvy will become immaterial when compared to the immediate problems at hand.
Eric,
In response to One-Third Of Colleges, Universities In ‘Real Financial Trouble’
No doubt, everything is going to come to a halt. People in the overspending bubble are going to burst unless as you mentioned have assets hold and sit on for a long time.
People are no longer going to support any institution and anything else for that matter, unless they’re stupid and don’t go into "survival mode".
Brad
More…
Draghi sends strong signal that ECB will act
CIGA Eric
First Bernanke hinted that the US stood ready to defend the US and by extension the global economy. Now, Draghi is sending a strong signal they’ll also do whatever it takes to protect the euro zone and global economy. Have you noticed the seas are beginning to withdrawal from the shoreline as the the tidal wave of money designed to save all approaches silently. The precious metals and equity markets have noticed.
Headline: Draghi sends strong signal that ECB will act
By David Milliken and Olesya Dmitracova
LONDON (Reuters) – European Central Bank President Mario Draghi pledged on Thursday to do whatever was necessary to protect the euro zone from collapse, including acting to lower unreasonably high government borrowing costs.
"Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough," he told an investment conference in London.
"To the extent that the size of the sovereign premia (borrowing costs) hamper the functioning of the monetary policy transmission channels, they come within our mandate."
The comments are Draghi’s boldest to date and suggest the ECB is ready to row back into the debt crisis to defend Italy and Spain whose borrowing costs have spiraled to unsustainable levels.
The euro jumped while German bond futures, typically favored by risk adverse investors, turned negative in response.
The ECB has kept its sovereign bond-buying program mothballed for months and internal opposition to reviving it is stiff so focus will turn to what else the ECB could do.
Economists think it could be forced to buy bonds again, or alternatively, support struggling euro zone countries via the back door.
On Wednesday, ECB policymaker Ewald Nowotny broke ranks with his colleagues, saying that giving Europe’s permanent rescue fund a banking license so that it could drawn on central bank funds had merits. Draghi and others have previously rejected that option.
Source: finance.yahoo.com
More…
New U.S. home sales decline 8.4% in June CIGA Eric
Trends or velocity and acceleration are more important than a single data point. While housing is bouncing upward from extremely oversold levels (chart), prudent traders continue to consider it as a trading opportunity only.
Chart: New Home Sales And Change YOY, SA
Housing is all about access to private credit. That access continues to deteriorate at an alarming pace (table). That means it’s getting harder to sell hew and existing houses when an increasing number of prospective buyers fail to qualify for credit.
Table: Table: Breakdown of Credit at All Commercial Banks
Source: edegrootinsights.blogspot.com
Headline: New U.S. home sales decline 8.4% in June
WASHINGTON (MarketWatch) – Sales of new single-family homes fell 8.4% in June to an annual rate of 350,000 after reaching a two-year high in May, the U.S. Commerce Department said Wednesday. Economists polled by MarketWatch had forecast new home sales to rise to an annual rate of 375,000 last month. Sales in May were revised up to a seasonally adjusted 382,000 from an initial reading of 369,000 – the best month of sales since April 2010. The median price of new homes, meanwhile, fell 1.9% in June to $232,600, the lowest level since January. The supply of new homes on the market would last 4.3 months if they were all sold before any others were built. That’s up from 4.0 months in May. Sales of new homes rose the fastest in the Northeast and fell the most in the South.
Source: finance.yahoo.com
More…
Jim,
Please find below a good article written by a Professor of Political Economy at Harvard University’s John F. Kennedy School on whose country are better prepared to live up this crisis.
His conclusion:
No country will be spared as almost none have all the 3 characteristics necessary to resist such crisis: solid democracy, internal market, and low public debt.
We won’t come back to the levels of growth we had in the last few decades for a long time. Protectionism will be on the rise world-wide (we are seeing this already). The US is stuck by political paralysis
Best regards,
CIGA Christopher
Dear Christopher,
The New Global Economy’s (Relative) Winners 13/07/2012 By Dani Rodrik
The world economy faces considerable uncertainty in the short term. Will the eurozone manage to sort out its problems and avert a breakup? Will the United States engineer a path to renewed growth? Will China find a way to reverse its economic slowdown?
The answers to these questions will determine how the global economy evolves over the next few years. But, regardless of how these immediate challenges are resolved, it is clear that the world economy is entering a difficult new longer-term phase as well – one that will be substantially less hospitable to economic growth than possibly any other period since the end of World War II.
Regardless of how they handle their current difficulties, Europe and America will emerge with high debt, low growth rates, and contentious domestic politics. Even in the best-case scenario, in which the euro remains intact, Europe will be bogged down with the demanding task of rebuilding its frayed union. And, in the US, ideological polarization between Democrats and Republicans will continue to paralyze economic policy.
Indeed, in virtually all advanced economies, high levels of inequality, strains on the middle class, and aging populations will fuel political strife in a context of unemployment and scarce fiscal resources. As these old democracies increasingly turn inward, they will become less helpful partners internationally – less willing to sustain the multilateral trading system and more ready to respond unilaterally to economic policies elsewhere that they perceive as damaging to their interests.
Meanwhile, large emerging markets such as China, India, and Brazil are unlikely to fill the void, as they will remain keen to protect their national sovereignty and room to maneuver. As a result, the possibilities for global cooperation on economic and other matters will recede further.
More…
My Dear Extended Family,
Q&A: What PFGBest Customers Can Expect
By JERRY A. DICOLO, TATYANA SHUMSKY and MIKE SPECTOR
Updated July 11, 2012, 6:23 p.m. ET
Futures-brokerage firm Peregrine Financial Group Inc., or PFGBest, filed to liquidate under Chapter 7 of the U.S. bankruptcy code on Tuesday, leaving customers wondering about the fate of their funds.
Although customers may get a quick return of some assets, the liquidation process can be confusing and lengthy. Here are answers to some questions about customers’ money.
Q: How much money is missing?
Regulators currently believe there is a shortfall in customer funds of roughly $215 million.
Q: Will customers get their money back?
Any money the trustee determines is still in segregated accounts—accounts specifically designed to hold customers’ funds—can be distributed quickly, potentially in just a few days, said bankruptcy experts.
But a shortfall in segregated funds could mean losses for customers if the money isn’t found.
Q: How do customers get money back?
In a futures-brokerage bankruptcy, a trustee is appointed to return segregated customer funds. The trustee also collects and liquidates company assets and distributes the proceeds, subject to court approval.
Q: Are there any other resources for customers?
CME Group said Wednesday that family farmers and ranchers with assets caught up in the brokerage’s collapse will be eligible to draw upon the exchange operator’s new insurance fund. The fund provides up to $25,000 per account to customers that suffer losses from the insolvency of a futures brokerage.
Q: What about open positions in futures and options that haven’t been settled?
When commodity brokers fail, open trading positions are often transferred to other brokerages. But in this case, those positions have already been liquidated by Jefferies Group Inc., JEF +1.44% which served as PFGBest’s clearinghouse. Jefferies on Wednesday said PFGBest-related cash of roughly $125 million will remain in fully segregated accounts until disbursement is directed by regulators.
Q: What do the company’s assets and liabilities mean for customers?
PFGBest said in its bankruptcy filing that its assets are between $500 million and $1 billion, and its liabilities are between $100 million to $500 million. If assets are in fact greater than liabilities, brokerage customers may have access to those assets before other creditors, bankruptcy experts say.
A bankruptcy judge would approve distribution of assets outside of segregated funds. Depending on the complexity of the case, that distribution could take months or even years, experts say. A criminal investigation, under way in this situation, could also delay any distributions.
Q: How does this matter differ from MF Global?
A: MF Global Holdings Ltd.’s MFGLQ 0.00% collapse in October resulted in a shortfall of roughly $1.6 billion in customer funds. Nine months later, customers have received about 80% of their U.S.-based funds as trustee James Giddens searches for more assets. Since PFGBest is a much smaller firm and believed to be less complex, it is possible that the bankruptcy case could proceed more quickly, experts say, but the timeline isn’t known.
Q: Where is the money right now?
Regulators are currently trying to locate customer funds, which stood at over $400 million as of April, according to data compiled by the Commodity Futures Trading Commission.
Q: Where can one get further information?
A meeting of creditors is scheduled for Sept. 5, 2012, at the office of the U.S. Trustee in Chicago. Trustees in bankruptcy cases will typically distribute contact details and a website to direct customers and creditors but that hasn’t happened yet.
More…
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The TSA, DHS and countless other security agencies have been
established to keep America safe from terrorist attacks in post-9/11
America. How far beyond that does the feds’ reach really go, though?The attacks September 11, 2001, were instrumental in enabling the US government to establish counterterrorism agencies to prevent future tragedies. Some officials say that they haven’t stopped there, though, and are spying on everyone in America — all in the name of national security.
Testimonies delivered in recent weeks by former employees of the National Security Agency suggest that the US government is granting itself surveillance powers far beyond what most Americans consider the proper role of the federal government.
Read More @ RT.com
The desire of gold is not for gold. It is for the means of freedom and benefit. –Ralph Waldo Emerson
Jim Sinclair’s Commentary
The downside is getting ready to accelerate.
Pending Sales of U.S. Homes Unexpectedly Fell 1.4% in June Michelle Jamrisko – Jul 26, 2012 7:14 AM MT
Contracts to purchase previously owned homes unexpectedly dropped in June for the second time in the last three months, a sign of limited momentum in housing.
The index of pending home resales decreased 1.4 percent to 99.3 after a revised 5.4 percent gain in May that was less than initially reported, figures from the National Association of Realtors showed today in Washington. The median forecast of economists surveyed by Bloomberg News called for a 0.3 percent June increase.
Slower job growth that’s holding down confidence and strict lending standards are restraining housing even with cheaper properties and mortgage rates at all-time lows. While acknowledging the improvement in housing, Federal Reserve Chairman Ben S. Bernanke said last week that policy makers are ready to take further action to boost an economy that faces a headwind from Europe’s debt crisis.
“One of the cruel facts of this current backdrop is that few people have really been able to take advantage of these historically low rates — whether that’s by choice or force,” Tom Porcelli, chief U.S. economist for RBC Capital Markets LLC in New York, said before the report. “You really haven’t seen purchase applications pick up in any meaningful way at this stage.”
Estimates in the Bloomberg survey of 34 economists ranged from a drop of 4 percent to a gain of 4 percent.
More…
Jim Sinclair’s Commentary
We can forget about the recovery. Now wait to see what happens over the next 10 weeks on the downside.
Foreclosure Filings Increase in 60% of Large U.S. Cities By Dan Levy – Jul 25, 2012 9:01 PM MT
Foreclosure filings rose in almost 60 percent of large U.S. cities in the first half of 2012, indicating many areas will have more distressed homes on the market later this year, RealtyTrac Inc. reported.
More than 1 million homes in metropolitan areas with populations of at least 200,000 received notices of default, auction or repossession, up 1.5 percent from the last six months of 2011, the Irvine, California-based data provider said today in a statement. Among the 20 largest markets, Tampa, Florida; Philadelphia; Chicago and New York City had the biggest percentage increases in filings.
The gain in foreclosure actions followed a probe into abusive lender practices that delayed bank seizures nationwide. More repossessions will buoy deals “in many local markets where a shortage of aggressively priced inventory has been holding up sales,” RealtyTrac Chief Executive Officer Brandon Moore said in the statement.
A $25 billion bank settlement announced Feb. 9 eased loan terms for some borrowers and set new guidelines for the five largest U.S. mortgage providers. Recent laws passed in Nevada and California, meanwhile, have made it harder for loan servicers to resume property seizures, Daren Blomquist, a RealtyTrac spokesman, said in a telephone interview.
The new regulations have been “a clock-stopper on lenders and led to more artificial decreases,” he said. Throughout the U.S., first-half filings, while up from the previous six months, were down almost 11 percent from a year earlier, RealtyTrac said.
More…
Jim Sinclair’s Commentary
Here is the latest from John Williams’ www.ShadowStats.com.
- Durable Goods Orders in Second Straight Quarterly Contraction
- Household Income Still Bottom-Bouncing
- June Home Sales Fall-Off, Quarterly Growth Slows/Contracts
"No. 458: June Durable Goods Orders, Home Sales, Household Income"
Web-page: http://www.shadowstats.com
Aden Sisters Forecast – Bubble Phase In Gold To Begin In 2013 And Possibly Reach? gold-speculator.com
JULY 26, 2012
Gold has been moving within a mega upchannel since 1970 and still has a ways to go before reaching the top side of this mega uptrend. How high is anyone’s guess but*were gold’s price rise to match the 2300% rise realized in the 1970s (and our research suggests we could see the start of the bubble phase by next year) we’d see a $6000 gold price, which would blow the gold price well above the mega upchannel. [Let us explain our conclusions with the use of 2 charts.
So say Mary Anne and Pamela Aden (Www.adenforecast.com)
The Adens go on to say, in part:
If gold breaks above $1650 and stays there, the worst will be behind us. Then $1700, $1800 and $1900 will be the next stepping stones in the renewed rise. Record high territory would confirm the making of a strong leg upward.
How High?
How high is anyone’s guess. It all depends on the explosive stage in the bull market. That phase is still to come and Chart 1 provides a good example of this.
As you can see, gold has been moving within a mega upchannel since 1970. The gold rise since 2001 still has a ways to go before reaching the top side of this mega uptrend.
Note on the top chart that gold moved into the upper side of the mega channel when it burst into record territory in September 2009. This was just six months after QE first started in March 2009.
When gold reached the $1900 record level last September, the leading indicator (below) rose to the normal high area and it’s been declining since then, now approaching the uptrend and zero line.
More…
Congressman Ron Paul on Bloomberg News – July 25 2012
Jim Sinclair’s Commentary
So many of you are asleep at the wheel and trusting of people who don’t give a damn about you.
Still Think That Money Market Fund Is “Cash”? by JOHN RUBINO on JULY 21, 2012
When investors decide to close out their riskier positions and move into “cash”, they don’t actually go to the bank and get a stack of twenties. Most just sell their stocks and let their broker sweep the proceeds into a money market fund which, they assume, is the same thing as cash because it holds high-quality short-term commercial paper that almost never defaults.
That pleasant assumption breaks down as soon as you look at a typical money market fund’s holdings and see that it owns, among other disturbing things, a lot of European bank debt.
But at least you can get your money out with a mouse click, right?
Well, maybe not. Apparently the Fed, cognizant of the potential weakness of the money fund system, is considering withdrawal limits:
Fed Eyes Limiting Money-Market Fund Withdrawals
NEW YORK–The Federal Reserve Bank of New York said it supports limiting some types of money-market fund withdrawals in a bid to protect those funds from suffering the equivalent of a bank run.
The recommendations came from a staff report released Thursday. New York Fed President William Dudley in a press release accompanying the document said he “strongly” endorses the ideas put forth by authors Patrick McCabe, Marco Cipriani, Michael Holscher and Antoine Martin.
“Further reform of money funds is essential for our nation’s financial stability,” Mr. Dudley said.
More…
Jim Sinclair’s Commentary
It will make it safer for those that have committed crimes in the mega banks.
When a restaurant has been used to launder money by the mafia and has
been running for a few years it must burnt down to hide the fact there
are no clients from the IRS.
When Enron, the OTC derivative restaurant, went broke the accountants
burned it down by shredding the transactions made with thousands of
straw partnerships. Now it is time to burn down the mega banks, too big
for jail, in order to hide the facts from the eyes of newly inspired
police of all kinds.
Breaking Up Banks Won’t Make Them Safer, Ex-Senator Says By Christine Harper – Jul 25, 2012 10:00 PM MT
Phil Gramm, the former U.S. senator who helped write the 1999 law that enabled the creation of financial giants such as Citigroup Inc. (C) and Bank of America Corp., said his legislation didn’t make the system any riskier.
The Gramm-Leach-Bliley Act repealed the 1933 prohibition against federally insured depository institutions combining with securities firms and insurers. While his law allows deposit- taking banks to affiliate with securities firms through holding companies, depositors and taxpayers are protected because affiliates can’t take capital out of the banks, Gramm said in a telephone interview yesterday.
“I don’t see any evidence that allowing them to affiliate through holding companies had anything to do with the financial crisis nor has anybody ever presented any evidence to suggest that it did,” said Gramm, 70. Companies that failed such as Lehman Brothers Holdings Inc. “tended to be narrowly focused.”
Sanford “Sandy” Weill, who created Citigroup and pushed for the Gramm-Leach-Bliley Act, said yesterday on CNBC that he would now support dismantling financial holding companies.
“What we should probably do is go and split up investment banking from banking,” Weill, 79, said in the interview. “Have banks do something that’s not going to risk the taxpayer dollars, that’s not going to be too big to fail.”
More…
Jim Sinclair’s Commentary
What a deal this is because today you commit the crime you pay the
fine. If the fine is less than the profit in the crime you win.
To call this the darkest age of finance in human history does not do it justice.
Mexico Hits HSBC with $28 Million Fine in Laundering Case Published July 25, 2012
MEXICO CITY – Mexico slammed banking giant HSBC with a $28 million fine for failing to prevent money laundering through accounts at the bank.
Mexico’s National Securities and Banking Commission said Wednesday that HSBC has paid the fines, equivalent to 379 million pesos, or about half of the subsidiary’s 2011 annual profits.
The commission, and a report by a U.S. senate investigative committee, found the bank failed to control suspicious flows of billions of dollars through its accounts and didn’t respond promptly after being warned about a huge swell in dollar cash transactions at the bank.
Guillermo Babatz, president of the banking commission, said that at its peak in the mid-2000s, HSBC had become the main shipper of dollar cash transfers from Mexico to the United States, accounting for about half of the total flow, even though it wasn’t then among the country’s largest banks.
Babatz said that regulators detected the swell of suspicious transactions and warned local management in 2007 and 2008, but got little response. He said regulators then took the unusual step of contacting top management of the bank’s central offices. "When we contacted the head offices, it was because we were very worried and didn’t get a response" from local management, who he said "minimized the risks."
More…
Jim Sinclair’s Commentary
Do you get the feeling that the lower tier good ole boys internationally are headed for jail?
Nomura CEO quits as insider trading scandal widens By Emi Emoto and Nathan Layne
TOKYO | Thu Jul 26, 2012 8:16am EDT
(Reuters) – Nomura Holdings Inc (8604.T) CEO Kenichi Watanabe resigned on Thursday over a widening insider trading scandal and will be replaced by company veteran Koji Nagai, as Japan’s top investment bank warned additional cases could come to light.
The management shake-up was confirmed in a news conference at the end of a dramatic day in Tokyo that also saw Watanabe’s top lieutenant, Takumi Shibata, resign over leaks of insider information to clients of its securities unit in 2010.
Watanabe is the second global bank boss to resign this month – Barclays (BARC.L) chief Bob Diamond stood down over the Libor rate-rigging scandal on July 3 – as the industry finds itself under huge political and regulatory pressure.
The departure of Watanabe and Shibata, the architects of Nomura’s takeover of the Asian and European assets of Lehman Brothers, raises questions about the future of the global expansion strategy they pursued.
Nagai, a three-decade company veteran who took over as head of the Nomura’s domestic securities unit in April as part of a management reshuffle, said he would map out a "new global strategy". He said he had no intention of dropping Nomura’s ambition of being a global investment bank centered in Asia, but suggested he may pursue further restructuring overseas.
More…
Jim Sinclair’s Commentary
Whatever cash is required here and there will be provided. That means
QE to infinity in the Western financial world regardless of camouflage
and denials.
Draghi Says ECB Will Do What’s Needed To Preserve Euro: Economy By Jeff Black and Jana Randow – Jul 26, 2012 9:50 AM ET
European Central Bank President “To the extent that the size of these sovereign premia hamper the functioning of the monetary policy transmission channel, they come within our mandate,” Draghi said in a speech at the Global Investment Conference in London today. “Within our mandate, the ECB is ready to do whatever it takes to preserve the euro,” he said, adding: “believe me, it will be enough.”
Financial markets surged on speculation the ECB will act to lower Spanish borrowing costs after yields on the nation’s bonds rose to levels that prompted bailouts for Greece,Portugal and Ireland. The ECB reluctantly started buying Spanish and Italian debt in August last year as part of its bond purchase program. The buying had little lasting effect and the ECB suspended the program in March.
“His comments certainly suggest that ECB purchases of Spanish and Italian bonds are back on the table for discussion,” said Chris Scicluna, head of economic research at Daiwa Capital Markets Europe. “But — just like last summer — we would expect any new ECB bond purchases to be temporary and limited until other policies are put in place.”
Mario Draghi said policy makers will do whatever is needed to preserve the euro, suggesting they may intervene in bond markets as surging yields in Spain and Italy threaten the existence of the 17-nation currency bloc.
More…
Dear Jim,
Here’s a way to keep track of the increasing number of municipal bankruptcies:
http://www.governing.com/gov-data/other/municipal-cities-counties-bankruptcies-and-defaults.html
Courtesy of: http://www.pensiontsunami.com/
Regards,
CIGA Tom
Eric,
How about the months of total crap reporting as a recovering economy?
Jim
Mailbox
CIGA Eric
Many of the world’s global citizens have already been forced into ‘survival mode’ by chronic unemployment, underemployment, and/or a general standard of living squeeze trigged by expenses rising faster than income for years. Survival mode will encompass a larger cross-section of the world’s developed nations as the financial crisis expands and intensifies in 2015. The distinction between who’s stupid or savvy will become immaterial when compared to the immediate problems at hand.
Eric,
In response to One-Third Of Colleges, Universities In ‘Real Financial Trouble’
No doubt, everything is going to come to a halt. People in the overspending bubble are going to burst unless as you mentioned have assets hold and sit on for a long time.
People are no longer going to support any institution and anything else for that matter, unless they’re stupid and don’t go into "survival mode".
Brad
More…
Draghi sends strong signal that ECB will act
CIGA Eric
First Bernanke hinted that the US stood ready to defend the US and by extension the global economy. Now, Draghi is sending a strong signal they’ll also do whatever it takes to protect the euro zone and global economy. Have you noticed the seas are beginning to withdrawal from the shoreline as the the tidal wave of money designed to save all approaches silently. The precious metals and equity markets have noticed.
Headline: Draghi sends strong signal that ECB will act
By David Milliken and Olesya Dmitracova
LONDON (Reuters) – European Central Bank President Mario Draghi pledged on Thursday to do whatever was necessary to protect the euro zone from collapse, including acting to lower unreasonably high government borrowing costs.
"Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough," he told an investment conference in London.
"To the extent that the size of the sovereign premia (borrowing costs) hamper the functioning of the monetary policy transmission channels, they come within our mandate."
The comments are Draghi’s boldest to date and suggest the ECB is ready to row back into the debt crisis to defend Italy and Spain whose borrowing costs have spiraled to unsustainable levels.
The euro jumped while German bond futures, typically favored by risk adverse investors, turned negative in response.
The ECB has kept its sovereign bond-buying program mothballed for months and internal opposition to reviving it is stiff so focus will turn to what else the ECB could do.
Economists think it could be forced to buy bonds again, or alternatively, support struggling euro zone countries via the back door.
On Wednesday, ECB policymaker Ewald Nowotny broke ranks with his colleagues, saying that giving Europe’s permanent rescue fund a banking license so that it could drawn on central bank funds had merits. Draghi and others have previously rejected that option.
Source: finance.yahoo.com
More…
New U.S. home sales decline 8.4% in June CIGA Eric
Trends or velocity and acceleration are more important than a single data point. While housing is bouncing upward from extremely oversold levels (chart), prudent traders continue to consider it as a trading opportunity only.
Chart: New Home Sales And Change YOY, SA
Housing is all about access to private credit. That access continues to deteriorate at an alarming pace (table). That means it’s getting harder to sell hew and existing houses when an increasing number of prospective buyers fail to qualify for credit.
Table: Table: Breakdown of Credit at All Commercial Banks
Source: edegrootinsights.blogspot.com
Headline: New U.S. home sales decline 8.4% in June
WASHINGTON (MarketWatch) – Sales of new single-family homes fell 8.4% in June to an annual rate of 350,000 after reaching a two-year high in May, the U.S. Commerce Department said Wednesday. Economists polled by MarketWatch had forecast new home sales to rise to an annual rate of 375,000 last month. Sales in May were revised up to a seasonally adjusted 382,000 from an initial reading of 369,000 – the best month of sales since April 2010. The median price of new homes, meanwhile, fell 1.9% in June to $232,600, the lowest level since January. The supply of new homes on the market would last 4.3 months if they were all sold before any others were built. That’s up from 4.0 months in May. Sales of new homes rose the fastest in the Northeast and fell the most in the South.
Source: finance.yahoo.com
More…
Jim,
Please find below a good article written by a Professor of Political Economy at Harvard University’s John F. Kennedy School on whose country are better prepared to live up this crisis.
His conclusion:
No country will be spared as almost none have all the 3 characteristics necessary to resist such crisis: solid democracy, internal market, and low public debt.
We won’t come back to the levels of growth we had in the last few decades for a long time. Protectionism will be on the rise world-wide (we are seeing this already). The US is stuck by political paralysis
Best regards,
CIGA Christopher
Dear Christopher,
As fundamentally useless as QE to infinity is, it allows the Fed and
Treasury to direct huge flows of funds into the bankrupt. There is no
limitation what bonds they can buy or loans they can make. The history
of 2009 underscores that and nothing has changed since that. Since
politicians always kick the can this is the only tool. The pinhead
academics that point to other tools might consider what use Operation
Twist was. The answer is zero. Therefore QE to infinity hidden in new
clothes begins soon.
Jim
The New Global Economy’s (Relative) Winners 13/07/2012 By Dani Rodrik
The world economy faces considerable uncertainty in the short term. Will the eurozone manage to sort out its problems and avert a breakup? Will the United States engineer a path to renewed growth? Will China find a way to reverse its economic slowdown?
The answers to these questions will determine how the global economy evolves over the next few years. But, regardless of how these immediate challenges are resolved, it is clear that the world economy is entering a difficult new longer-term phase as well – one that will be substantially less hospitable to economic growth than possibly any other period since the end of World War II.
Regardless of how they handle their current difficulties, Europe and America will emerge with high debt, low growth rates, and contentious domestic politics. Even in the best-case scenario, in which the euro remains intact, Europe will be bogged down with the demanding task of rebuilding its frayed union. And, in the US, ideological polarization between Democrats and Republicans will continue to paralyze economic policy.
Indeed, in virtually all advanced economies, high levels of inequality, strains on the middle class, and aging populations will fuel political strife in a context of unemployment and scarce fiscal resources. As these old democracies increasingly turn inward, they will become less helpful partners internationally – less willing to sustain the multilateral trading system and more ready to respond unilaterally to economic policies elsewhere that they perceive as damaging to their interests.
Meanwhile, large emerging markets such as China, India, and Brazil are unlikely to fill the void, as they will remain keen to protect their national sovereignty and room to maneuver. As a result, the possibilities for global cooperation on economic and other matters will recede further.
More…
My Dear Extended Family,
How anyone can put any money in a securities/commodities
clearinghouse is beyond me. You risk your financial life to win trading
then end up with practically nothing whatsoever.
The system is totally broken. Governments are busted. The securities
insurance programs are wildly over extended by the fact that their
capitalization cannot guarantee what they are supposed to be
guaranteeing
QE invents money out of thin air, and because of that is the only
central bank tool and will have to run at full speed to infinity. How
the Fed and Treasury utilize QE is totally up to them. They could buy MS
or PFG bonds if they wanted to.
Right now in a busted clearinghouse you have no financial relief from
anyone because of bankruptcy laws. If you think any industry
organization of government regulator is going to give you a cent you are
really stupid. You have to assume that if it was not for funds that
have to trade commodities, the commodities market volume would be
finished. The commodity market of the future has to be guaranteed by the
US Treasury and Fed like they guaranteed OTC derivatives, or it will
not exist.
You want to see an explosion watch when the clearinghouses in grains
implode. Clearinghouse risk exists in shares as well as commodities, so
how the hell can you sit back so comfortably, trusting the typical
sociopath Wall Streeter to put your money ahead of his/hers?
Those of you with your fancy special tax treatment retirement
accounts are sitting ducks dependent on your clearing house broker
and/or the will of the government.
Gold is the only asset on the planet without a liability attached to
it. Gold is going to and through $3500 without any question in my mind.
9 tries to break $1525 have now failed. The manipulators are put of
aces. The proof was a recent email from gold’s father of $1100 calling
me a fool three days in a row.
If you own gold in futures or ETFs (they own their gold in paper) take delivery or end up with absolutely nothing whatsoever.
Regards,
Jim
Jim
By JERRY A. DICOLO, TATYANA SHUMSKY and MIKE SPECTOR
Updated July 11, 2012, 6:23 p.m. ET
Futures-brokerage firm Peregrine Financial Group Inc., or PFGBest, filed to liquidate under Chapter 7 of the U.S. bankruptcy code on Tuesday, leaving customers wondering about the fate of their funds.
Although customers may get a quick return of some assets, the liquidation process can be confusing and lengthy. Here are answers to some questions about customers’ money.
Q: How much money is missing?
Regulators currently believe there is a shortfall in customer funds of roughly $215 million.
Q: Will customers get their money back?
Any money the trustee determines is still in segregated accounts—accounts specifically designed to hold customers’ funds—can be distributed quickly, potentially in just a few days, said bankruptcy experts.
But a shortfall in segregated funds could mean losses for customers if the money isn’t found.
Q: How do customers get money back?
In a futures-brokerage bankruptcy, a trustee is appointed to return segregated customer funds. The trustee also collects and liquidates company assets and distributes the proceeds, subject to court approval.
Q: Are there any other resources for customers?
CME Group said Wednesday that family farmers and ranchers with assets caught up in the brokerage’s collapse will be eligible to draw upon the exchange operator’s new insurance fund. The fund provides up to $25,000 per account to customers that suffer losses from the insolvency of a futures brokerage.
Q: What about open positions in futures and options that haven’t been settled?
When commodity brokers fail, open trading positions are often transferred to other brokerages. But in this case, those positions have already been liquidated by Jefferies Group Inc., JEF +1.44% which served as PFGBest’s clearinghouse. Jefferies on Wednesday said PFGBest-related cash of roughly $125 million will remain in fully segregated accounts until disbursement is directed by regulators.
Q: What do the company’s assets and liabilities mean for customers?
PFGBest said in its bankruptcy filing that its assets are between $500 million and $1 billion, and its liabilities are between $100 million to $500 million. If assets are in fact greater than liabilities, brokerage customers may have access to those assets before other creditors, bankruptcy experts say.
A bankruptcy judge would approve distribution of assets outside of segregated funds. Depending on the complexity of the case, that distribution could take months or even years, experts say. A criminal investigation, under way in this situation, could also delay any distributions.
Q: How does this matter differ from MF Global?
A: MF Global Holdings Ltd.’s MFGLQ 0.00% collapse in October resulted in a shortfall of roughly $1.6 billion in customer funds. Nine months later, customers have received about 80% of their U.S.-based funds as trustee James Giddens searches for more assets. Since PFGBest is a much smaller firm and believed to be less complex, it is possible that the bankruptcy case could proceed more quickly, experts say, but the timeline isn’t known.
Q: Where is the money right now?
Regulators are currently trying to locate customer funds, which stood at over $400 million as of April, according to data compiled by the Commodity Futures Trading Commission.
Q: Where can one get further information?
A meeting of creditors is scheduled for Sept. 5, 2012, at the office of the U.S. Trustee in Chicago. Trustees in bankruptcy cases will typically distribute contact details and a website to direct customers and creditors but that hasn’t happened yet.
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