U.S. Government Prepares for 'Crisis
The U.S. Path to Collapse
New York Sun: As dollar diminishes, why shouldn't gold be audited?
The Death Of Cash? All Over The World Governments Are Banning Large Cash Transactions.
Harrisburg, Pennsylvania defaulting on its bonds.
Russian Panic Buying Fuels Food Price Speculation
Mozambique Police Fire At Crowds Protesting Prices
Fed Officials Discussed Further Stimulus Steps
World Markets Fall Again on Economic Fears
July Unemployment Up in About Half of US Cities
US Markets Suffer Worst August in Almost a Decade
Posted: Sep 03 2010 By: Jim Sinclair Post Edited: September 3, 2010 at 4:55 pm
Filed under: In The News
Posted: Sep 03 2010 By: Jim Sinclair Post Edited: September 3, 2010 at 4:54 pm Filed under: In The News
Thought For The Day
The accounting for trading departments would also reflect the error account and markdown of positions.
It is reasonable then to assume that the mark up of OTC derivatives due to the FASB’s capitulation would also be accounted for there. These mark ups then would be reflected as trading profits even though they are purely accounting profits.
As such, the closing down of proprietary trading departments may well reflect recent modest or negative performance in actual trading aside from paper mark ups of OTC derivatives.
Jim Sinclair’s Commentary
The OTC derivative market is alive and kicking with no meaningful changes whatsoever.
If it is free of clearing house requirements in any major financial center, it is free everywhere.
Brussels set to give way on OTC derivatives By Jeremy Grant in London and Nikki Tait in Brussels
Published: September 1 2010 18:59 | Last updated: September 1 2010 18:59
European companies look set for a victory in their efforts to persuade regulators not to force them to use clearing houses for over-the-counter derivatives trades after the European Commission proposed that they be given exemptions from sweeping regulation to clamp down on such markets.
The move, contained in a draft regulation, comes after months of lobbying by large industrial companies like Siemens, Eon, Lufthansa and Rolls-Royce. They argued that forcing them to process their OTC derivatives trades through clearing houses would cause a huge drain on cash, possibly hurting European economic growth prospects.
Brussels is two weeks away from finalising its version of regulations in the Dodd-Frank Act agreed by the US Congress in June that clamp down on the OTC derivatives markets, parts of which were blamed for exacerbating the 2008 financial crisis.
They would force more OTC derivatives to be traded on exchanges and electronic trading platforms, and push them through clearing houses to safeguard the financial system against the fallout from a catastrophic default, such as the failure of Lehman Brothers.
A clearing house stands between two parties to a trade, ensuring completion even if one party defaults.
More…
Jim Sinclair’s Commentary
John sheds light on today’s economic figures. This is a must have (by subscription) resource.
- August Unemployment: U.3 = 9.6%, U.6 = 16.7%, SGS = 22.0%
- August Payrolls Fall 54,000, Gain 60,000 Ex-Census Workers
- Better-Than-Expected Payroll Changes Were Not Statistically Meaningful
"No. 321: August Employment and Unemployment"
http://www.shadowstats.com/
Jim Sinclair’s Commentary
The least publicized economic figure today.
Construction Spending in U.S. Fell Twice as Much as Forecast September 2nd, 2010
By Shobhana Chandra
Sept. 1 (Bloomberg) — Construction spending in July fell twice as much as forecast, led by a slump in homebuilding that will depress U.S. economic growth.
The 1 percent drop brought spending to $805.2 billion, the lowest level in a decade, after a revised 0.8 percent drop in June that wiped out a previously estimated gain, Commerce Department figures showed today in Washington. Spending on federal government projects fell by the most in a year.
Builders are facing a slump in demand following the end of a homebuyer tax credit, even with mortgage rates at a record low, while mounting foreclosures will add to the inventory and further restrain prices. Government construction spending is also likely to stay weak as stimulus-linked outlays wane and state budgets shrink.
“Housing is fairly weak and construction related to the stimulus is fading,” Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, said before the report. “Some commercial projects may have been delayed as businesses are uncertain about the outlook.”
Construction spending was down 11 percent in the year ended in July.
More…
Jim Sinclair’s Commentary
Like the first few banks to go broke, the increasing amount of significant cities seeking bankruptcy protection is going to grow and grow.
The most important question not answered here is WHAT chapter of the Bankruptcy Act did Harrisburg file under?
Harrisburg, Pa., defaulting on its bonds By Aaron Smith, CNNMoney.com staff writer
September 2, 2010: 11:22 AM ET
NEW YORK (CNNMoney.com) — The capital city Pennsylvania is broke and will be skipping this month’s multi-million dollar bond payment.
On Sept. 15, Harrisburg, Pa., was scheduled to make a $3.29 million payment on the bonds it issued to build a trash plant. But, the cash-strapped city doesn’t have the dough.
"The city’s budget is in deficit," said Chuck Ardo, spokesman for Harrisburg Mayor Linda Thompson. "We’re looking for ways to trim the budget just to keep services going."
"Now the chickens have come home to roost," the mayor said in a statement released Wednesday.
In May, Moody’s knocked the rating on its general-obligation bonds three notches to B2 — five steps below investment grade. To put that into perspective: Moody’s rating on Greece’s government debt sits at A3 — still investment grade.
"It’s a warning to holders of bonds issued by financially stressed state and local governments," said John Lonski, chief economist for Moody’s Investors Services. "Credit crisis is still with us."
More…
Jim Sinclair’s Commentary
This take has significant merit regarding bailouts assuming the run on this bank continues.
They would, however, be significantly back door.
Kabul Bank Woes Spur Call For Another U.S. Treasury Bailout
Something of a bank run appears to be underway in Afghanistan as scared depositors pull their money out of Kabul Bank, or try to.
The withdrawals by Kabul Bank depositors was triggered by news that two top bank officials left the institution earlier this week as corruption allegations swirled around the bank.
The two officials were reportedly involved in unauthorized investments involving about $160 million in Dubai real estate, according to a big shareholder in the bank, Mahmoud Karzai, the older brother of Afghan President Hamid Karzai.
Mahmoud is making a suggestion that is likely to gain very little traction in Washington: he’s calling for the U.S. to bail out Kabul Bank.
An excerpt from the Washington Post which has been closely tracking the Kabul Bank story:
Action by the United States, said Mahmoud Karzai, would prevent a run on Kabul Bank and protect other banks, too. He said Kabul Bank is "stable and has money" but cannot withstand a stampede by panicked depositors.
More…
The accounting for trading departments would also reflect the error account and markdown of positions.
It is reasonable then to assume that the mark up of OTC derivatives due to the FASB’s capitulation would also be accounted for there. These mark ups then would be reflected as trading profits even though they are purely accounting profits.
As such, the closing down of proprietary trading departments may well reflect recent modest or negative performance in actual trading aside from paper mark ups of OTC derivatives.
Jim Sinclair’s Commentary
The OTC derivative market is alive and kicking with no meaningful changes whatsoever.
If it is free of clearing house requirements in any major financial center, it is free everywhere.
Brussels set to give way on OTC derivatives By Jeremy Grant in London and Nikki Tait in Brussels
Published: September 1 2010 18:59 | Last updated: September 1 2010 18:59
European companies look set for a victory in their efforts to persuade regulators not to force them to use clearing houses for over-the-counter derivatives trades after the European Commission proposed that they be given exemptions from sweeping regulation to clamp down on such markets.
The move, contained in a draft regulation, comes after months of lobbying by large industrial companies like Siemens, Eon, Lufthansa and Rolls-Royce. They argued that forcing them to process their OTC derivatives trades through clearing houses would cause a huge drain on cash, possibly hurting European economic growth prospects.
Brussels is two weeks away from finalising its version of regulations in the Dodd-Frank Act agreed by the US Congress in June that clamp down on the OTC derivatives markets, parts of which were blamed for exacerbating the 2008 financial crisis.
They would force more OTC derivatives to be traded on exchanges and electronic trading platforms, and push them through clearing houses to safeguard the financial system against the fallout from a catastrophic default, such as the failure of Lehman Brothers.
A clearing house stands between two parties to a trade, ensuring completion even if one party defaults.
More…
Jim Sinclair’s Commentary
John sheds light on today’s economic figures. This is a must have (by subscription) resource.
- August Unemployment: U.3 = 9.6%, U.6 = 16.7%, SGS = 22.0%
- August Payrolls Fall 54,000, Gain 60,000 Ex-Census Workers
- Better-Than-Expected Payroll Changes Were Not Statistically Meaningful
"No. 321: August Employment and Unemployment"
http://www.shadowstats.com/
Jim Sinclair’s Commentary
The least publicized economic figure today.
Construction Spending in U.S. Fell Twice as Much as Forecast September 2nd, 2010
By Shobhana Chandra
Sept. 1 (Bloomberg) — Construction spending in July fell twice as much as forecast, led by a slump in homebuilding that will depress U.S. economic growth.
The 1 percent drop brought spending to $805.2 billion, the lowest level in a decade, after a revised 0.8 percent drop in June that wiped out a previously estimated gain, Commerce Department figures showed today in Washington. Spending on federal government projects fell by the most in a year.
Builders are facing a slump in demand following the end of a homebuyer tax credit, even with mortgage rates at a record low, while mounting foreclosures will add to the inventory and further restrain prices. Government construction spending is also likely to stay weak as stimulus-linked outlays wane and state budgets shrink.
“Housing is fairly weak and construction related to the stimulus is fading,” Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, said before the report. “Some commercial projects may have been delayed as businesses are uncertain about the outlook.”
Construction spending was down 11 percent in the year ended in July.
More…
Jim Sinclair’s Commentary
Like the first few banks to go broke, the increasing amount of significant cities seeking bankruptcy protection is going to grow and grow.
The most important question not answered here is WHAT chapter of the Bankruptcy Act did Harrisburg file under?
Harrisburg, Pa., defaulting on its bonds By Aaron Smith, CNNMoney.com staff writer
September 2, 2010: 11:22 AM ET
NEW YORK (CNNMoney.com) — The capital city Pennsylvania is broke and will be skipping this month’s multi-million dollar bond payment.
On Sept. 15, Harrisburg, Pa., was scheduled to make a $3.29 million payment on the bonds it issued to build a trash plant. But, the cash-strapped city doesn’t have the dough.
"The city’s budget is in deficit," said Chuck Ardo, spokesman for Harrisburg Mayor Linda Thompson. "We’re looking for ways to trim the budget just to keep services going."
"Now the chickens have come home to roost," the mayor said in a statement released Wednesday.
In May, Moody’s knocked the rating on its general-obligation bonds three notches to B2 — five steps below investment grade. To put that into perspective: Moody’s rating on Greece’s government debt sits at A3 — still investment grade.
"It’s a warning to holders of bonds issued by financially stressed state and local governments," said John Lonski, chief economist for Moody’s Investors Services. "Credit crisis is still with us."
More…
Jim Sinclair’s Commentary
This take has significant merit regarding bailouts assuming the run on this bank continues.
They would, however, be significantly back door.
Kabul Bank Woes Spur Call For Another U.S. Treasury Bailout
Something of a bank run appears to be underway in Afghanistan as scared depositors pull their money out of Kabul Bank, or try to.
The withdrawals by Kabul Bank depositors was triggered by news that two top bank officials left the institution earlier this week as corruption allegations swirled around the bank.
The two officials were reportedly involved in unauthorized investments involving about $160 million in Dubai real estate, according to a big shareholder in the bank, Mahmoud Karzai, the older brother of Afghan President Hamid Karzai.
Mahmoud is making a suggestion that is likely to gain very little traction in Washington: he’s calling for the U.S. to bail out Kabul Bank.
An excerpt from the Washington Post which has been closely tracking the Kabul Bank story:
Action by the United States, said Mahmoud Karzai, would prevent a run on Kabul Bank and protect other banks, too. He said Kabul Bank is "stable and has money" but cannot withstand a stampede by panicked depositors.
More…
Filed under: Jim's Mailbox
Jim,
There is no way for the spinmeisters to spin this.
CIGA UD
Dear CIGA UD,
It is not even amazing anymore in how the media handles economic statistics. Everything is MOPEd away.
Regards,
Jim
Pending Home Sales Reconfirm The Housing Market is Crashing Michael David White | Sep. 3, 2010, 9:30 AM
Record low levels of demand continue to haunt the U.S. housing market with July pending home sales re-confirming previous crash-level readings.
![clip_image002[1]](http://thenewmortgagecompany.files.wordpress.com/2010/09/10-key-charts-sales-pending-adjusted-nar-2001-to-july-2010-high-to-low-by-housingstory-net1.jpg "clip_image002[1]")
More…
Gloves About To Come Off For Gold Stocks CIGA Eric
Individual gold stocks and gold stock indices are beginning to break out of long-term consolidations without much attention. The heavily followed Amex gold bug index sits above important resistance at 479.35. The gloves will come off quickly over price once the computers and hedgies start buying en mass after technical confirmation. The setup of "three taps and out" is nearly complete.
Amex Gold Bug Index (HUI):
![clip_image003[1]](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHaltgdPocFu2w_U_Ey9mUmjadfmhB4y8-KjiLi4XtsLCXinBkrCuIIwmKOvd4BHOZAiszDwJFo4Kzjymnj0CRTqUhRxI5gRQbHNryorK9dvMRviWOcxOXSa17AMon_47BVAj5PdDdsfs/s1600/HUI.JPG "clip_image003[1]")
More…
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