Following "Very Difficult" Troika Teleconference, Greece Nowhere Near A Deal As Sunday Night Deadline Approaches
It is not shaping up to be a pleasant weekend for Greek finance minister Evangelos Venizelos, who as a reminder until June 17, 2011 was the Greek defense minister and likely the man responsible for buying up all that European military equipment (with whose money nobody knows), or his boss, G-Pap successor and former ECB VP Lucas Papademos. The reason is that Greece is scrambling to reach a deal with the Troika that permits the €130 billion second bailout to be disbursed (unclear how the €15 billion add on would be theater), yet a key precondition of Troika demands is labor reform (a cut of the €750/month minimum wage, and various headcut reductions across the nation), which however as reported yesterday has seen all three coalition cabinet member throw up on. In other words, Greece has about 24 hours to do the impossible, unless of course it simply delays and does nothing once again. Alas, the real issue is that unlike before, there is a hard deadline of a bond maturity cash outflow on March 20, and absent resolution, which especially on the PSI issue should come far in advance as an exchange offer takes at least 6 weeks to finalize, there will be no deal. So while this weekend may come and go, without anything being resolved, the days can kicking, as Zero Hedge said back in January, are ending.How Europe Has Evolved From A Democracy To A Bankocracy And Why Austerity Will Lead To Chaos
In one of the clearest (and most optically pleasing) discussions of recent months, David McWiliams (of Punk Economics) succinctly explains how Europe has evolved from a democracy to a bankocracy,
the implications of which lead to austerity for the people and a
Franco-German imposition (the 'fiscal compact') that can only lead to
social unrest and chaos. In this brief (and expertly illustrated) video,
the Irish economist clarifies Europe's 'dirty little secret' where
economic policy is being run almost exclusively for the banks which, as
we see in Greece and Ireland, means the political elite are becoming
more and more detached from the people. The terror of the r-word
(referendum) looms large as McWilliams analogizes the two ways out of a debt crisis (squeeze the debtor or forgive the debtor)
with the catholic and protestant perspectives on sin and forgiveness.
While falling short of calling for governments to go full-Keynesian
(everyone knows you never go full-Keynesian), he (focusing on the
problems of the current hopeful solution) summarizes the fiscal union as
envisaged by France and Germany (which actually penalizes countries
that are in trouble, rather than help them) as not a friendly-union but a vindictive strait-jacket put in place to help banks, not countries.
It comes as no surprise to him that the price of Gold (and Bunds) is
firm as the 'example' that Greece is likely to set (or face extreme
social upheaval) will domino-like stumble across the other troubled
nations and as he points "we have been warned". Our view remains that austerity works if countries manage to cut expenses while keeping a balance. Alas, the balance is out of skew due to 30 years of runaway full-Keynesianism, which leads indeed to the problems that McWilliams so well espouses.Martenson Interviews Dines: 'Wealth In The Ground' Is Your Best Bet to Surviving the Coming 'Supernova of Inflations'
James
Dines has been in the business of making bold calls for over 50 years.
In this deep-diving interview, he minces no words about the dire risks
the US economy - and the world at large - faces at this juncture.
Simply put, he sees the excessive credit in the financial system as
having placed the global economy on a collision-course with
hyperinflation. Unlike past periods of turmoil, there are no truly
'safe' places for investment capital to hide. Geographic markets and
almost all asset classes are positively correlated these days. They
share many of the same risks and if a systemic crash occurs, they will
crash together. At this point, says Mr Dines, you want to invest in
assets that can not be printed away by government desperation. You want
to hold hard assets; "wealth in the ground" as Dines says (physical
commodities, mining companies, etc). They're your best best to make
money faster at a rate faster than inflation is going to happen.Presenting The Russian Naval Base In Tartus, Syria, Or Good Luck UN Security Council
UPDATE: Hardly reassuring (from Bloomberg): *U.S. IS `DISGUSTED' WITH RUSSIA, AMBASSADOR RICE SAYS AT UN
The world is suddenly aflutter in its usual fake indignation (how many times have we seen this) having realized what has been going on in Syria for months on end. It was none other than the Headhunter In Chief who "condemned the "unspeakable assault" Saturday by Syrian forces on the city of Homs, a sustained attack that activists say killed more than 200 people in what may be the bloodiest confrontation of the uprising against Bashar Assad's regime. The assault sparked fierce international outcry ahead of a meeting Saturday of the U.N. Security Council, where the U.S. and other nations are pushing for a vote on an Arab League-backed resolution calling for Assad to step down." Needless to say, just like in the case of Libya, both China and Russia are now a confirmed veto for any security council resolution that enforces a regime change, no fly zone, or what have you. Only this time the stake for Russia (and China as well, as Syria is nothing but a gateway to Iran), are far higher. And as Zero Hedge noted regarding Iranian developments yesterday, "We've seen this play by play many times before and frankly at this point the posturing is getting just silly. What we do want to find out, however, is how will Russia get involved in all of this. Because if recent actions are any precedent, we fully expect Putin to send an aircraft carrier, purely symbolically, in the Arabian Sea himself, just to indicate that any invasion, pardon, liberation, of Iran crude, will first have to go through him. And not to mention China... or India." Sure enough, speaking of aircraft carriers, it was none other than the Russian navy's aircraft carrier Kuznetsov that landed at the Russian naval base in Tartus "in support of the al-Assad regime" back in November, and it is the Tartus base that is arguably one of the most critical locations for the US military vis-a-vis developments in the middle east. And here is why Russia will block any attempt by the west to impose its own will in Syria.
Trader Dan on King World News Weekly Metals Wrap
Trader Dan at Trader Dan's Market Views - 3 hours ago
Please click on the following link to listen in to my regular weekly radio
interview with Eric King on the KWN Weekly Metals Wrap.
*http://tinyurl.com/6s78s2t*
Baltic Dry Index and Related Shipping Problems with Greece/Phony Jobs report,1.2 million jobs seekers removed from BLS
Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 3 hours ago
Good morning Ladies and Gentlemen: The price of gold fell by $24.20 to $1735.80. Silver fell by 48 cents to $33.73. The bankers, true to form decided to carry out a raid surrounding the jobs report. I highlighted to you on Thursday that the crooks always monkey around by orchestrating a raid surrounding a jobs report and again they did not disappoint. Do not worry, gold and silver will rise
from FAS.org:
A House-Senate conference report this week called on the Administration to accelerate the use of civilian unmanned aerial systems (UAS), or “drones,” in U.S. airspace.
The pending authorization bill for the Federal Aviation Administration directs the Secretary of Transporation to develop within nine months “a comprehensive plan to safely accelerate the integration of civil unmanned aircraft systems into the national airspace system.”
“The plan… shall provide for the safe integration of civil unmanned aircraft systems into the national airspace system as soon as practicable, but not later than September 30, 2015.”
The conference bill, which still awaits final passage, also calls for establishment of UAS test ranges in cooperation with NASA and the Department of Defense, expanded use of UAS in the Arctic region, development of guidance for the operation of public unmanned aircraft systems, and new safety research to assess the risk of “catastrophic failure of the unmanned aircraft that would endanger other aircraft in the national airspace system.”
The Department of Defense is pursuing its own domestic UAS activities for training purposes and “domestic operations,” according to a 2007 DoD-FAA memorandum of agreement. (“Army Foresees Expanded Use of Drones in U.S. Airspace,” Secrecy News, January 19, 2012.)
Update: In the recently enacted FY2012 National Defense Authorization Act (section 1097), Congress mandated that “the Administrator of the Federal Aviation Administration shall establish a program to integrate unmanned aircraft systems into the national airspace system at six test ranges.” This new test range program is supposed to be established within 180 days.
Original Source @ FAS.org
A House-Senate conference report this week called on the Administration to accelerate the use of civilian unmanned aerial systems (UAS), or “drones,” in U.S. airspace.
The pending authorization bill for the Federal Aviation Administration directs the Secretary of Transporation to develop within nine months “a comprehensive plan to safely accelerate the integration of civil unmanned aircraft systems into the national airspace system.”
“The plan… shall provide for the safe integration of civil unmanned aircraft systems into the national airspace system as soon as practicable, but not later than September 30, 2015.”
The conference bill, which still awaits final passage, also calls for establishment of UAS test ranges in cooperation with NASA and the Department of Defense, expanded use of UAS in the Arctic region, development of guidance for the operation of public unmanned aircraft systems, and new safety research to assess the risk of “catastrophic failure of the unmanned aircraft that would endanger other aircraft in the national airspace system.”
The Department of Defense is pursuing its own domestic UAS activities for training purposes and “domestic operations,” according to a 2007 DoD-FAA memorandum of agreement. (“Army Foresees Expanded Use of Drones in U.S. Airspace,” Secrecy News, January 19, 2012.)
Update: In the recently enacted FY2012 National Defense Authorization Act (section 1097), Congress mandated that “the Administrator of the Federal Aviation Administration shall establish a program to integrate unmanned aircraft systems into the national airspace system at six test ranges.” This new test range program is supposed to be established within 180 days.
Original Source @ FAS.org
When
you use the Internet in a public place, do you prefer to have as much
privacy as possible? Well, that makes you a potential terrorist. According to the FBI,
Internet privacy is now considered to be suspicious activity. If you
are out in public and you attempt to keep snoopers from peeking at your
computer screen, then according to the FBI they should gather as much
information about you as they can and they should report you to the
authorities immediately. If this seems completely and totally ridiculous
to you, then you are not alone. Millions of Americans have become
deeply concerned about the constantly expanding definition of
“suspicious activity” in the United States. Sadly, the federal
government is now engaging in an all-out attempt to have us all spy on
one another. All over America, the Department of Homeland Security is
running ads promoting the “See Something, Say Something” campaign. They even had 8,000 stadium workers
at the Super Bowl this year go through special training on how to spot
potential terrorists. So the next time you see a hot dog vendor, keep
in mind that he might also be part of a special anti-terrorism task
force.
Read More @ EndOfTheAmericanDream.com
Collapse Confirmation News: Special Report 2/4/2012
by David Galland, Casey Research:
[...] I recently had the opportunity to speak with an acquaintance of
mine who is a serving police officer, albeit in a small town that will
go unnamed in order to protect his identity and possibly his job.This particular town, like so many others, is now festooned with a modern, oversized Homeland Security Center (formally known as a police and fire station). In response to my question as to how he liked the new digs, he told me that they were quite spacious and even a bit luxurious, complete with automatic lights, water taps and even toilets. He also told me that the building was set up so that, on a moment’s notice, an entire emergency federal task force could be moved in, plugged in, and ready to operate.
Further on in the conversation, he let it be known that the police department in this rural town, a place where anything more than the most minor of crimes is virtually unknown, will soon have its squad cars outfitted with special equipment allowing its officers to pull up next to a bank, school, or any number of other buildings and wirelessly tap into the security camera system to observe what’s going on.
It was at that point that I couldn’t help but comment, “You know, all of these sort of things are a bit concerning to the average citizen, wouldn’t you agree?”
To which he nodded in agreement, before adding, “Personally, I’m a lot more worried about the corporations.”
I like this guy, but that comment crossed a personal line with me, and so I said, somewhat stridently, “Seriously? Listen, unlike the government, which can force you to do things that you don’t want to do – under penalty of jail or worse – corporations can’t force you to do anything. In fact, they have to treat you right in order to earn your business.”
In response, he waved his hands to break into my modestly indignant diatribe and proceeded to clarify his position – tellingly, in a lowered voice. What he said caught me by surprise.
“No, you don’t understand. That’s not what I’m talking about. What I’m talking about are the corporations that are now working with us. You see, it’s illegal for the government to keep certain kinds of data on the public without a court order. That’s not the case for the corporations. Get it? Technically, we don’t keep the data, the corporations do, we just access it. That’s what worries me.”
Read More @ CaseyResearch.com
Battlefield Egypt: Hundreds Injured, 7 Dead as Riots Grip Cities
by Saman Mohammadi, InfoWars.com:
“Ruin from Man is most conceal’d when near
And sends the dreadful Tidings in the Blow.” – Edward Young, Night Thoughts.
The world economy is on the brink of a crisis that will end modern civilization as we know it.
Nations, or I should say banking colonies, will collapse left and right. Global poverty and unemployment rates have risen to levels that are socially and economically unmanageable under the current global financial, political, and bureaucratic system which favours the few at the expense of the many.
It is fitting that the collapse of Western Civilization is
beginning in its ancient cradle, Greece. This great nation has fallen to
the banksters who are behind the despotic new world order.
In the article, “Art Cashin: Beware The Ides Of March–Or Maybe A Few Days Later,” journalist Gus Lubin says that global investors are expecting a structured default to take place in Greece on March 20.
Read More @ InfoWars.com
Ty Andros of www.Traderview.com, a speaker at FreedomFest’s Global Financial Summit, believes that the economic system and the Dollar as it presently exists are facing an extinction event. Not that humanity is, these currency shifts have taken place many times before and will continue. They are simply part of human existence and no matter how we try, we cannot change that reality.The solution is simply to understand where we are in the cycle and invest your resources accordingly. Precious metals are certainly an insurance policy against the resulting chaos and Ty thinks that Silver is your greatest ally in protecting and building wealth. As a believer in the Austrian School of Economists, Ty says that the current crisis was long ago foreseen, and is unavoidable. Better to be prepared than to be surprised.
Click Here to Listen to the Podcast
In the article, “Art Cashin: Beware The Ides Of March–Or Maybe A Few Days Later,” journalist Gus Lubin says that global investors are expecting a structured default to take place in Greece on March 20.
Read More @ InfoWars.com
Ty Andros of www.Traderview.com, a speaker at FreedomFest’s Global Financial Summit, believes that the economic system and the Dollar as it presently exists are facing an extinction event. Not that humanity is, these currency shifts have taken place many times before and will continue. They are simply part of human existence and no matter how we try, we cannot change that reality.The solution is simply to understand where we are in the cycle and invest your resources accordingly. Precious metals are certainly an insurance policy against the resulting chaos and Ty thinks that Silver is your greatest ally in protecting and building wealth. As a believer in the Austrian School of Economists, Ty says that the current crisis was long ago foreseen, and is unavoidable. Better to be prepared than to be surprised.
Click Here to Listen to the Podcast
Welcome
back, Ari!! If you don’t know ARISTOTLE, that’s probably because he
took a brief hiatus of 7 years and 3 days from posting comments about
Freegold. And that was after 6 years of posts and comments prior. So
needless to say, I’m THRILLED to have him back!
Ari wrote me an email the other day including this: “In the
meanwhile, I’m happy to note that Bill Gross has (yet again) stepped up
to the challenge of carrying some water for us today. Begins folksy and
ends golden. Now that’s what I call having a worthy waterboy(!),,, he
being manager of the largest mutual fund on the planet (i.e., PIMCO’s
$242 billion Total Return bond fund).”
Read More @ FOFOA.Blogspot.com
Read More @ FOFOA.Blogspot.com
As the old saying goes, the more things change, the more they stay the same.
Some 32 years ago, Ronald Reagan ran for U.S. President, in part, on a
promise to appoint a “gold commission” to study the issue of whether
and how the United States should return to some variation of the gold
standard.
The nation had just come through a couple of tough decades during which, at times, it seemed as if the whole fabric of American society was being ripped apart. Devastating inflation and a lagging economy only made worse the social and emotional turmoil created by changing mores and standards surrounding civil rights, gender roles and military intervention. President Richard Nixon’s shocking act of severing the U.S. dollar’s ties to gold had failed to bring economic prosperity to the nation, and the Republican Party was feeling a bit of buyers’ remorse. The idea of a return to a gold-based monetary system gained steam.
Read More @ WealthCycles.com
The nation had just come through a couple of tough decades during which, at times, it seemed as if the whole fabric of American society was being ripped apart. Devastating inflation and a lagging economy only made worse the social and emotional turmoil created by changing mores and standards surrounding civil rights, gender roles and military intervention. President Richard Nixon’s shocking act of severing the U.S. dollar’s ties to gold had failed to bring economic prosperity to the nation, and the Republican Party was feeling a bit of buyers’ remorse. The idea of a return to a gold-based monetary system gained steam.
Read More @ WealthCycles.com
From the Washington Post, we learn that “January job gains have economists rethinking outlooks.”
Oh, really? Last I looked, the bear leg of the larger business cycle was still in full effect. Nothing’s changed in other words, since 2001 – or more pertinently 2008, when according to our elvish analysis the fiat-dollar economy, worldwide, collapsed.
How do we know it collapsed? Well, various central banks have committed possibly more than US$50 trillion since then to propping up various financial facilities. That doesn’t sound very healthy, does it? Say, you go ask for a US$50 trillion loan (if you can figure out where to apply) and see whether you get it.
More on this in a minute. The idea of an up-trending of the US economy is nothing more than a bald-faced lie, the most devious kind of propaganda. Here’s a bit more from the article:
Read More @ TheDailyBell.com
Oh, really? Last I looked, the bear leg of the larger business cycle was still in full effect. Nothing’s changed in other words, since 2001 – or more pertinently 2008, when according to our elvish analysis the fiat-dollar economy, worldwide, collapsed.
How do we know it collapsed? Well, various central banks have committed possibly more than US$50 trillion since then to propping up various financial facilities. That doesn’t sound very healthy, does it? Say, you go ask for a US$50 trillion loan (if you can figure out where to apply) and see whether you get it.
More on this in a minute. The idea of an up-trending of the US economy is nothing more than a bald-faced lie, the most devious kind of propaganda. Here’s a bit more from the article:
Read More @ TheDailyBell.com
Government Education
by Alasdair Macleod, GoldMoney.com:
The
consolidation of gold’s bull phase from October 2008 to the peak last
September was a classic three-leg correction: an initial slide, rally,
and final sell-off. Silver followed a similar but more violent pattern.
The psychology was there too, with the final sell-off convincing many
investors the game was finally over.
Those who sold will most probably be kicking themselves. Consolidations that break established trends, such as 200-day moving averages, shake out weak holders who will buy again higher up when they are more confident. The big traders in the futures market know this: your losses are simply their gains. And as a result both gold and silver are on a far sounder footing with these weak holders out of the way. It is lethal for your savings to play this game. Instead it is more sensible to understand what is happening in simple economic terms. To do this you must turn your normal thinking upside down, and realise that what is happening to precious metals prices is only a reflection of what is actually happening to paper money.
Read More @ GoldMoney.com
from The Financial Survival Network:
We caught up with Peter Schiff of EuroPacific Capital at FreedomFest’s Global Economic Summit in the Bahamas. Peter is never shy about voicing his opinion about the impending crash of the US Dollar and the fiat monetary regime. While he’s been warning us about the inevitable collapse, he’s putting himself on the line now and believes that time is running short. He expects the event to occur within the next 1-2 years and believes that in addition to living on borrowed money, the government is also living on borrowed time.
As he sees it, interest rates have been suppressed for so long, that they have no place to go but up. Once this occurs, printing and borrowing to somehow achieve solvency will come to an end and then the political establishment is going to have to get serious about controlling spending and ending debt based economics. The unfortunate result will be a decrease in American living standards, however, there is a silver lining. And that is, should the Country adopt sound economic policies, we will rapidly emerge from the quagmire as an opportunity based economy once again.
Click Here to Listen to the Podcast
Dear CIGAs,
Please click the link below to listen to this week’s metals wrap up from King World News, featuring our very own Trader Dan Norcini.
Click here to listen to the weekly metals wrap up…
Jim Sinclair’s Commentary
Picking sides for an unavoidable conflict
Russia, China veto UN resolution on Syria killings February 4, 2012 10:08 AM
UNITED NATIONS – Russia and China on Saturday vetoed a UN Security Council resolution condemning the Syrian government’s deadly crackdown on protests for the second time.
Thirteen countries voted for the resolution proposed by European and Arab nations to give strong backing to the Arab League’s plan to end President Bashar al-Assad’s crackdown. But Russia and China made a repeat of their rare double veto carried out on October 5 on an earlier condemnation.
US ambassador Susan Rice called the block "shameful." She said the veto showed how Russia and China aimed to "sell out the Syrian people and shield a craven tyrant."
Arab nations also condemned the move.
"I would like to express our great regret and disappointment" at the veto, said Morocco’s UN ambassador Mohammed Loulichki, whose country is the Arab member of the 15-member council and played a key role in the drawing up the resolution.
More…
Jim Sinclair’s Commentary
This is not nonsense, but rather a very interesting constitutional challenge to the economic rights of states.
States seek currencies made of silver and gold By Blake Ellis @CNNMoney
February 3, 2012: 10:53 AM ET
NEW YORK (CNNMoney) — A growing number of states are seeking shiny new currencies made of silver and gold.
Worried that the Federal Reserve and the U.S. dollar are on the brink of collapse, lawmakers from 13 states, including Minnesota, Tennessee, Iowa, South Carolina and Georgia, are seeking approval from their state governments to either issue their own alternative currency or explore it as an option. Just three years ago, only three states had similar proposals in place.
"In the event of hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System … the State’s governmental finances and private economy will be thrown into chaos," said North Carolina Republican Representative Glen Bradley in a currency bill he introduced last year.
Unlike individual communities, which are allowed to create their own currency — as long as it is easily distinguishable from U.S. dollars — the Constitution bans states from printing their own paper money or issuing their own currency. But it allows the states to make "gold and silver Coin a Tender in Payment of Debts."
To the state legislators who are proposing state-issued currencies, that means gold and silver are fair game, said Edwin Vieira, an alternative currency proponent and attorney specializing in Constitutional law. And since gold has grown exponentially more valuable, while the U.S. dollar continues to lose ground, the notion has become increasingly appealing to state lawmakers, he said.
More…
Jim Sinclair’s Commentary
QE to infinity for sure. AIG, City and The Squid cross the 200 day MA on the upside.
God bless liquidity.
Jim Sinclair’s Commentary
Here is the latest from John Williams’ www.ShadowStats.com.
- Basic Economic Outlook Unaltered by Stronger Labor Data
- January Jobs Reading Still at Levels of 11 Years Ago
- January Unemployment: 8.3% (U.3), 15.1% (U.6), 22.5% (SGS)
- Money Supply M3 Growth Is Picking Up
No. 416: Payrolls, Unemployment and Revisions, M3, PCE Deflator
http://www.shadowstats.com
Jim Sinclair’s Commentary
The units of concern this year is the US dollar more so than the Euro, believe it or not. That concept would horrify MSM.
Maybe Mr. Chiang should firm up his contacts at the IMF immediately.
California Faces Cash Shortfall by March on Low Receipts, Controller Says By Christopher Palmeri – Jan 31, 2012 4:37 PM ET
California (STOCA1)’s cash may be exhausted by March as tax collections trail budgeted amounts, Controller John Chiang said in a letter to lawmakers.
The nation’s most-populous state needs $3.3 billion for March and the first two weeks of April, Chiang said in the letter to state Senator Mark Leno and Assemblyman Bob Blumenfield, who lead the Joint Legislative Budget Committee. The Assembly Budget Committee is holding a hearing today in Sacramento on the state’s spending plan.
Unlike 2009, when he was forced to issue IOUs to creditors, the controller said the current cash shortfall can be managed through payment delays, as well as external and internal borrowing. He urged legislators to pursue that course.
“Although this cash management plan relies on still more borrowing, payment delays and deferrals, we believe this is the most prudent and responsible course of action considering we have about four weeks before the advent of the cash shortfall,” Chiang said in the letter.
State receipts were $2.6 billion lower than forecast through Dec. 31, while expenditures were an equal amount higher, Chiang said. In a previous report, Chiang said the collections shortfall for the fiscal year that began in July was led by corporate and personal-income taxes.
The Assembly panel voted to approve $865 million in internal borrowing recommended by Chiang at its meeting today.
More…
Jim Sinclair’s Commentary
When the mob has used a restaurant to launder money, what do they then do with it?
Obama administration to move forward with closing Fannie Mae, Freddie Mac By Brady Dennis, Published: February 2
The Obama administration plans to push forward this spring with efforts to wind down government-backed housing giants Fannie Mae and Freddie Mac and attract more private funding to mortgage markets, Treasury Secretary Timothy F. Geithner said Thursday.
Geithner told reporters that administration officials have begun more intensively exploring legislative options for overhauling the nation’s housing finance system with lawmakers on Capitol Hill, as well as with academics and outside advocacy groups.
Still, he said that concrete changes won’t come soon.
“It’s going to be a complicated process,” Geithner said. “We don’t expect to legislate this year.”
Since the financial crisis, the country’s housing finance system has relied almost exclusively on federal support for funding new home loans. In a white paper last February, the administration outlined three options for a long-term overhaul of the housing market.
Each of those proposals retained the Federal Housing Administration, which focuses on loans to borrowers who can’t afford sizable down payments. Each option also proposed the elimination of Fannie and Freddie but offered different approaches on how — or whether — to replace them.
More…
Jim Sinclair’s Commentary
My reporting requirements are three calendar days after any transaction of shares owned, influence or controlled.
These guys get 30 days to report and probably count the days as business days.
Senate OKs insider trading curbs on lawmakers By David LawderPosted 2012/02/02 at 7:19 pm EST
The Senate on Thursday approved new curbs aimed at preventing lawmakers from trading shares based on inside information, but also extended the bill’s disclosure requirements to more than 300,000 other federal employees.
The Senate voted 96-3 to pass the Stop Trading on Congressional Knowledge (STOCK) Act, which would require members of Congress to file electronic disclosures of their stock trades within 30 days of the transactions.
As a rare piece of legislation with strong bipartisan support in a deeply divided Congress – and the promise of a quick signature by President Barack Obama – the measure was quickly laden with more than 20 amendments this week.
Senators who saw the "clean government bill" as a vehicle bound for quick passage sought to attach proposals ranging from a ban on executive bonuses at Fannie Mae and Freddie Mac to a limit on terms for members of Congress.
Similar legislation is pending in the Republican-led House of Representatives, and a spokeswoman for Majority Leader Eric Cantor has said he plans to bring it to a vote this month.
More…
Monty Guild’s Commentary
This is totally understandable in light of the massive balance sheet expansion by the seven major central banks since the end of 2010. Clearly it takes some time for money to move from the balance sheet into the economy and that is happening now worldwide with vigor.
Bets on Raw Materials Expanding Fastest Since 2006 2012-02-03 05:55:45.651 GMT
By Joe Richter and Whitney McFerron
Investments in commodities are expanding at the quickest pace in six years on signs of rising economic growth, even as JPMorgan Chase & Co. and Goldman Sachs Group Inc. warn that some prices have rallied too fast.
The number of futures contracts on 24 commodities from oil to copper rose 9.3 percent last month, the most since January 2006, according to data compiled by Bloomberg. Speculators are the most bullish since November, Commodity Futures Trading Commission data show. Gold and silver had the best start to a year since 1983, orange juice posted its biggest rally in more than three decades, the LMEX gauge of six industrial metals rose the most since 2006, and cattle futures advanced to a record.
Raw materials are rebounding from the first annual drop in three years on growing signs the world will skirt another recession and reports that manufacturing is expanding from China to India to the U.S. Investors are betting record-low U.S. interest rates and China’s efforts to shore up growth will bolster demand. The optimism is being tempered by Europe’s widening debt crisis, with the International Monetary Fund warning it could derail the global economy.
“The economic news has been good, and people were underinvested, and that’s a recipe for markets to rise,” said Jess Gaspar, a managing director of Commonfund Asset Management in Wilton, Connecticut, which oversees $25 billion of assets. “If the economy continues strong and central banks continue with monetary easing, then that would be very bullish for risky assets and for commodities in particular.”
The Standard & Poor’s GSCI Total Return Index of 24 raw materials rose 2.2 percent in January, rebounding from last year’s 1.2 percent decline. Silver, zinc and nickel led the gains, while natural gas plunged 16 percent and crude oil slipped 0.4 percent. The MSCI All-Country World Index of equities rose 5.8 percent including dividends, the best start in 18 years. Global bonds climbed 0.6 percent and the U.S. Dollar Index retreated 1.1 percent, data compiled by Bloomberg show.
More…
Jim Sinclair’s Commentary
The transfer of raw materials by the end user to the venue of the end user? Do you think anyone wants their gold back where practically all sovereign material is being stored in a vault in NYC?
What starts as a trickle in this business always ends as a torrent.
COPPER
Copper Stockpiles in Shanghai Surge to 21-Month High
Feb. 3 (Bloomberg) — Copper stockpiles monitored by the Shanghai Futures Exchange advanced to a 21-month high, data from the bourse showed today. Inventories gained 48,246 metric tons, or 37 percent, to 179,891 tons, the highest since May 2010, according to a survey of 10 warehouses in Shanghai, the exchange said on its website. Stockpiles at bonded warehouses added 4,102 tons to 9,749 tons. Aluminum inventories rose 46,078 tons, or 19 percent, to a seven-month high of 283,503 tons, according to a survey of 20 warehouses in Shanghai, Guangdong, Jiangsu and Zhejiang provinces. Zinc stockpiles climbed 3,426 tons to 373,124 tons, based on a survey of 15 warehouses in Shanghai, Guangdong and Zhejiang, while those of lead rose 528 tons to 29,962 tons.
Jim Sinclair’s Commentary
I am certain that China’s invitation for its population to invest in gold is a covert means of having a large inventory of additional gold on hand.
Further to this, the figures are now adjustable on import to make sovereign look as investment demand.
China’s gold output and demand could be far greater than ‘official’ data suggest
Comment from Jeff Nichols suggests that Chinese gold production and consumption may be considerably higher than the statistics released by the country would indicate. Author: Lawrence Williams
Posted: Thursday , 02 Feb 2012
Following the recent Mineweb article on Chinese gold production and consumption (see China enhances position as world No. 1 gold producer – but where’s it all going?) we have received the following comment s from specialist precious metals analyst, Jeff Nichols of American Precious Metals Advisors and Rosland Capital, which suggests that both Chinese gold production and consumption may be considerably higher than that suggested by official and semi-official statistics coming out of the Asian giant.
Nichols avers that China’s domestic gold mine output is, without a doubt, much higher than reported. Actual gold mine output could easily be close to 400 tons and possibly more for the following reasons:
The China Gold Association (CGA) numbers reflect production by their members only — but omit gold mined by non-members. These include many small, unofficial mining operations some of which are illegal existing in the "underground economy". The CGA data also excludes production from mines owned and operated by the military, which is significant according to sources. Not to be overlooked is by-product output from copper, silver, and other metal mining activity. Again, this is significant though hard to know just how significant.
In addition to mine output, analysts and commentators seem to forget about secondary supply — that is from recycling of jewelry, investment bars, and industrial scrap. Just to get an "order-of-magnitude" possibility, in recent years global secondary supply from scrap recycling has contributed roughly one-third of total worldwide supply. If scrap contributed only five or ten percent of China’s total gold supply it would still be quite important.
Next, Western analysts are estimating that China’s total gold imports last year were around 490 tons — but no one talks about "illegal" imports — that is gold smuggled into China. We know smuggling is quite significant in some countries — Vietnam and India, for example. We can only imagine how many tons of gold in the form of tael bars, wafers, coins, investment-grade jewelry, etc. is carried into China each year by travellers and professional smuggler
More…
Junior Resources Companies Set to Outperform? Source: Frank Holmes, U.S. Global Investors (1/27/12)
In volatile markets, small stocks typically lag larger companies as investors flee what they perceive to be risk. However, this love affair with large caps is generally short-lived, as investors return to the beaten-up small caps when the turmoil subsides. Historically, small caps have outperformed their larger counterparts.
In 2011, junior miners were shunned, but Global Resources Fund (PSPFX) co-portfolio managers Evan Smith and Brian Hicks pointed out to me this week that we’re beginning to see signs of small-cap strength.
This chart compares the performance of the S&P TSX Venture Index (TSX), which holds a basket of junior resources stocks, to the returns of the Morgan Stanley Commodity Related Index (CRX). You can see that the junior stocks began to outperform around July 2010 and carried that momentum over a period of six months, reaching a high in March 2011. That’s when investor took a turn for the worse and volatility began picking up, sending the TSX tumbling compared to the CRX.
The TSX versus the CRX measure hit a low on Dec. 14, well below the historical average. In technical terms, the Dec. 14 level was 1.37 standard deviations below the two-year mean. Small caps have only received this level of punishment a little more than 10% of the time over the past two years.
More…
Dear Jim,
Your most recent interview with Ellis Martin was amazing. I’ve listened to it carefully twice to make sure I was taking everything in. I remember thinking it seemed extremely fishy when they were talking about a 50% haircut on Greek debt and it was announced that would not be a CDF triggering event. As usual, you have made it crystal clear how this has come about. It was amazing (disgusting?) to see who makes up the voting members on the ISDA Determinations Committees. Also, based on a Q&A the ISDA issued on the Greek debt crisis, it appears there is no mechanism for appeal. Ridiculous.
CIGA Richard
Public Policy Choice: Deal With Consequences Today or Maintain the Peace & Deal With Them Later? CIGA Eric
State and local governments have the following choice:
(1) Maintain or increase the trend towards public spending cuts enacted Q3 2009 (see chart 1). While this choice plays well in the headlines, it carries various consequences ranging from social unrest to economic contraction, or
(2) The return public spending policies. The return of public spending will likely maintain “the peace” and support economic growth, but it represents only a temporary solution to the severe problem of unsustainable and unserviceable debt burdens.
Chart 1: Government Consumption Expenditures and Gross Investment (GCEI) As A %GDP Average from 1947
State and local governments must also realize that once the market has decided public deficits are no longer sustainable, the above choices will no longer affect market consequences. A downside break of the formula’s continuation pattern will mark that point of policy irrelevancy.
Chart 2: US Federal Budget (Surplus or Deficit As A % of GDP, 12 Month Moving Average) and Gold London P.M. Fixed
Headline: California at Risk of Running Out of Money by March
California needs to come up with more than $3 billion to avoid burning through its cash by March, according to the state controller, who urged borrowing and delaying some payments.
"Assuming no additional revenue loss, erosion of borrowable internal funds, or significant spikes in spending, $3.3 billion of cash solutions are needed to address California’s liquidity needs during this period," State Controller John Chiang said in a letter to the chairman and vice chairman of the Joint Legislative Budget Committee released on Tuesday.
Chiang said California does not need to issue IOUs again as it did during a cash crunch in 2009 or delay tax refunds, noting he has developed a plan with the state treasurer’s office and the state’s finance department that would postpone some payments and borrow from external sources and from state accounts to bolster the state’s cash.
Source: cnbc.com
More…
Jim,
According to the Swiss Newspaper, Le Temps, I understand that Swiss Competition Commission (COMCO) received a denunciation from an insider ("auto-dénonciation").
The probe involves UBS and Credit Suisse, as well as Bank of Tokyo-Mitsubishi UFJ, Citigroup Inc., Deutsche Bank Aktiengesellschaft, HSBC Holdings plc, JP Morgan Chase & Co., Mizuho Financial Group Inc., Rabobank Groep N.V., Royal Bank of Scotland Group plc, Société Générale S.A., and Sumitomo Mitsui Banking Corporation.
Other news in English:
Banks suspected of cartel activity
Libor Probe in Switzerland Examines, UBS, Credit Suisse, 10 Other Banks
Best regards,
CIGA Christopher
Christopher,
My goodness, how could you ever think these Banksters would do such a thing? Tisk-tisk, or in India, che-che.
Jim
The
consolidation of gold’s bull phase from October 2008 to the peak last
September was a classic three-leg correction: an initial slide, rally,
and final sell-off. Silver followed a similar but more violent pattern.
The psychology was there too, with the final sell-off convincing many
investors the game was finally over.Those who sold will most probably be kicking themselves. Consolidations that break established trends, such as 200-day moving averages, shake out weak holders who will buy again higher up when they are more confident. The big traders in the futures market know this: your losses are simply their gains. And as a result both gold and silver are on a far sounder footing with these weak holders out of the way. It is lethal for your savings to play this game. Instead it is more sensible to understand what is happening in simple economic terms. To do this you must turn your normal thinking upside down, and realise that what is happening to precious metals prices is only a reflection of what is actually happening to paper money.
Read More @ GoldMoney.com
from The Financial Survival Network:
We caught up with Peter Schiff of EuroPacific Capital at FreedomFest’s Global Economic Summit in the Bahamas. Peter is never shy about voicing his opinion about the impending crash of the US Dollar and the fiat monetary regime. While he’s been warning us about the inevitable collapse, he’s putting himself on the line now and believes that time is running short. He expects the event to occur within the next 1-2 years and believes that in addition to living on borrowed money, the government is also living on borrowed time.
As he sees it, interest rates have been suppressed for so long, that they have no place to go but up. Once this occurs, printing and borrowing to somehow achieve solvency will come to an end and then the political establishment is going to have to get serious about controlling spending and ending debt based economics. The unfortunate result will be a decrease in American living standards, however, there is a silver lining. And that is, should the Country adopt sound economic policies, we will rapidly emerge from the quagmire as an opportunity based economy once again.
Click Here to Listen to the PodcastDear CIGAs,
Please click the link below to listen to this week’s metals wrap up from King World News, featuring our very own Trader Dan Norcini.
Click here to listen to the weekly metals wrap up…
Jim Sinclair’s Commentary
Picking sides for an unavoidable conflict
Russia, China veto UN resolution on Syria killings February 4, 2012 10:08 AM
UNITED NATIONS – Russia and China on Saturday vetoed a UN Security Council resolution condemning the Syrian government’s deadly crackdown on protests for the second time.
Thirteen countries voted for the resolution proposed by European and Arab nations to give strong backing to the Arab League’s plan to end President Bashar al-Assad’s crackdown. But Russia and China made a repeat of their rare double veto carried out on October 5 on an earlier condemnation.
US ambassador Susan Rice called the block "shameful." She said the veto showed how Russia and China aimed to "sell out the Syrian people and shield a craven tyrant."
Arab nations also condemned the move.
"I would like to express our great regret and disappointment" at the veto, said Morocco’s UN ambassador Mohammed Loulichki, whose country is the Arab member of the 15-member council and played a key role in the drawing up the resolution.
More…
Jim Sinclair’s Commentary
This is not nonsense, but rather a very interesting constitutional challenge to the economic rights of states.
States seek currencies made of silver and gold By Blake Ellis @CNNMoney
February 3, 2012: 10:53 AM ET
NEW YORK (CNNMoney) — A growing number of states are seeking shiny new currencies made of silver and gold.
Worried that the Federal Reserve and the U.S. dollar are on the brink of collapse, lawmakers from 13 states, including Minnesota, Tennessee, Iowa, South Carolina and Georgia, are seeking approval from their state governments to either issue their own alternative currency or explore it as an option. Just three years ago, only three states had similar proposals in place.
"In the event of hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System … the State’s governmental finances and private economy will be thrown into chaos," said North Carolina Republican Representative Glen Bradley in a currency bill he introduced last year.
Unlike individual communities, which are allowed to create their own currency — as long as it is easily distinguishable from U.S. dollars — the Constitution bans states from printing their own paper money or issuing their own currency. But it allows the states to make "gold and silver Coin a Tender in Payment of Debts."
To the state legislators who are proposing state-issued currencies, that means gold and silver are fair game, said Edwin Vieira, an alternative currency proponent and attorney specializing in Constitutional law. And since gold has grown exponentially more valuable, while the U.S. dollar continues to lose ground, the notion has become increasingly appealing to state lawmakers, he said.
More…
Jim Sinclair’s Commentary
QE to infinity for sure. AIG, City and The Squid cross the 200 day MA on the upside.
God bless liquidity.
Jim Sinclair’s Commentary
Here is the latest from John Williams’ www.ShadowStats.com.
- Basic Economic Outlook Unaltered by Stronger Labor Data
- January Jobs Reading Still at Levels of 11 Years Ago
- January Unemployment: 8.3% (U.3), 15.1% (U.6), 22.5% (SGS)
- Money Supply M3 Growth Is Picking Up
No. 416: Payrolls, Unemployment and Revisions, M3, PCE Deflator
http://www.shadowstats.com
Jim Sinclair’s Commentary
The units of concern this year is the US dollar more so than the Euro, believe it or not. That concept would horrify MSM.
Maybe Mr. Chiang should firm up his contacts at the IMF immediately.
California Faces Cash Shortfall by March on Low Receipts, Controller Says By Christopher Palmeri – Jan 31, 2012 4:37 PM ET
California (STOCA1)’s cash may be exhausted by March as tax collections trail budgeted amounts, Controller John Chiang said in a letter to lawmakers.
The nation’s most-populous state needs $3.3 billion for March and the first two weeks of April, Chiang said in the letter to state Senator Mark Leno and Assemblyman Bob Blumenfield, who lead the Joint Legislative Budget Committee. The Assembly Budget Committee is holding a hearing today in Sacramento on the state’s spending plan.
Unlike 2009, when he was forced to issue IOUs to creditors, the controller said the current cash shortfall can be managed through payment delays, as well as external and internal borrowing. He urged legislators to pursue that course.
“Although this cash management plan relies on still more borrowing, payment delays and deferrals, we believe this is the most prudent and responsible course of action considering we have about four weeks before the advent of the cash shortfall,” Chiang said in the letter.
State receipts were $2.6 billion lower than forecast through Dec. 31, while expenditures were an equal amount higher, Chiang said. In a previous report, Chiang said the collections shortfall for the fiscal year that began in July was led by corporate and personal-income taxes.
The Assembly panel voted to approve $865 million in internal borrowing recommended by Chiang at its meeting today.
More…
Jim Sinclair’s Commentary
When the mob has used a restaurant to launder money, what do they then do with it?
Obama administration to move forward with closing Fannie Mae, Freddie Mac By Brady Dennis, Published: February 2
The Obama administration plans to push forward this spring with efforts to wind down government-backed housing giants Fannie Mae and Freddie Mac and attract more private funding to mortgage markets, Treasury Secretary Timothy F. Geithner said Thursday.
Geithner told reporters that administration officials have begun more intensively exploring legislative options for overhauling the nation’s housing finance system with lawmakers on Capitol Hill, as well as with academics and outside advocacy groups.
Still, he said that concrete changes won’t come soon.
“It’s going to be a complicated process,” Geithner said. “We don’t expect to legislate this year.”
Since the financial crisis, the country’s housing finance system has relied almost exclusively on federal support for funding new home loans. In a white paper last February, the administration outlined three options for a long-term overhaul of the housing market.
Each of those proposals retained the Federal Housing Administration, which focuses on loans to borrowers who can’t afford sizable down payments. Each option also proposed the elimination of Fannie and Freddie but offered different approaches on how — or whether — to replace them.
More…
Jim Sinclair’s Commentary
My reporting requirements are three calendar days after any transaction of shares owned, influence or controlled.
These guys get 30 days to report and probably count the days as business days.
Senate OKs insider trading curbs on lawmakers By David LawderPosted 2012/02/02 at 7:19 pm EST
The Senate on Thursday approved new curbs aimed at preventing lawmakers from trading shares based on inside information, but also extended the bill’s disclosure requirements to more than 300,000 other federal employees.
The Senate voted 96-3 to pass the Stop Trading on Congressional Knowledge (STOCK) Act, which would require members of Congress to file electronic disclosures of their stock trades within 30 days of the transactions.
As a rare piece of legislation with strong bipartisan support in a deeply divided Congress – and the promise of a quick signature by President Barack Obama – the measure was quickly laden with more than 20 amendments this week.
Senators who saw the "clean government bill" as a vehicle bound for quick passage sought to attach proposals ranging from a ban on executive bonuses at Fannie Mae and Freddie Mac to a limit on terms for members of Congress.
Similar legislation is pending in the Republican-led House of Representatives, and a spokeswoman for Majority Leader Eric Cantor has said he plans to bring it to a vote this month.
More…
Monty Guild’s Commentary
This is totally understandable in light of the massive balance sheet expansion by the seven major central banks since the end of 2010. Clearly it takes some time for money to move from the balance sheet into the economy and that is happening now worldwide with vigor.
Bets on Raw Materials Expanding Fastest Since 2006 2012-02-03 05:55:45.651 GMT
By Joe Richter and Whitney McFerron
Investments in commodities are expanding at the quickest pace in six years on signs of rising economic growth, even as JPMorgan Chase & Co. and Goldman Sachs Group Inc. warn that some prices have rallied too fast.
The number of futures contracts on 24 commodities from oil to copper rose 9.3 percent last month, the most since January 2006, according to data compiled by Bloomberg. Speculators are the most bullish since November, Commodity Futures Trading Commission data show. Gold and silver had the best start to a year since 1983, orange juice posted its biggest rally in more than three decades, the LMEX gauge of six industrial metals rose the most since 2006, and cattle futures advanced to a record.
Raw materials are rebounding from the first annual drop in three years on growing signs the world will skirt another recession and reports that manufacturing is expanding from China to India to the U.S. Investors are betting record-low U.S. interest rates and China’s efforts to shore up growth will bolster demand. The optimism is being tempered by Europe’s widening debt crisis, with the International Monetary Fund warning it could derail the global economy.
“The economic news has been good, and people were underinvested, and that’s a recipe for markets to rise,” said Jess Gaspar, a managing director of Commonfund Asset Management in Wilton, Connecticut, which oversees $25 billion of assets. “If the economy continues strong and central banks continue with monetary easing, then that would be very bullish for risky assets and for commodities in particular.”
The Standard & Poor’s GSCI Total Return Index of 24 raw materials rose 2.2 percent in January, rebounding from last year’s 1.2 percent decline. Silver, zinc and nickel led the gains, while natural gas plunged 16 percent and crude oil slipped 0.4 percent. The MSCI All-Country World Index of equities rose 5.8 percent including dividends, the best start in 18 years. Global bonds climbed 0.6 percent and the U.S. Dollar Index retreated 1.1 percent, data compiled by Bloomberg show.
More…
Jim Sinclair’s Commentary
The transfer of raw materials by the end user to the venue of the end user? Do you think anyone wants their gold back where practically all sovereign material is being stored in a vault in NYC?
What starts as a trickle in this business always ends as a torrent.
COPPER
Copper Stockpiles in Shanghai Surge to 21-Month High
Feb. 3 (Bloomberg) — Copper stockpiles monitored by the Shanghai Futures Exchange advanced to a 21-month high, data from the bourse showed today. Inventories gained 48,246 metric tons, or 37 percent, to 179,891 tons, the highest since May 2010, according to a survey of 10 warehouses in Shanghai, the exchange said on its website. Stockpiles at bonded warehouses added 4,102 tons to 9,749 tons. Aluminum inventories rose 46,078 tons, or 19 percent, to a seven-month high of 283,503 tons, according to a survey of 20 warehouses in Shanghai, Guangdong, Jiangsu and Zhejiang provinces. Zinc stockpiles climbed 3,426 tons to 373,124 tons, based on a survey of 15 warehouses in Shanghai, Guangdong and Zhejiang, while those of lead rose 528 tons to 29,962 tons.
Jim Sinclair’s Commentary
I am certain that China’s invitation for its population to invest in gold is a covert means of having a large inventory of additional gold on hand.
Further to this, the figures are now adjustable on import to make sovereign look as investment demand.
China’s gold output and demand could be far greater than ‘official’ data suggest
Comment from Jeff Nichols suggests that Chinese gold production and consumption may be considerably higher than the statistics released by the country would indicate. Author: Lawrence Williams
Posted: Thursday , 02 Feb 2012
Following the recent Mineweb article on Chinese gold production and consumption (see China enhances position as world No. 1 gold producer – but where’s it all going?) we have received the following comment s from specialist precious metals analyst, Jeff Nichols of American Precious Metals Advisors and Rosland Capital, which suggests that both Chinese gold production and consumption may be considerably higher than that suggested by official and semi-official statistics coming out of the Asian giant.
Nichols avers that China’s domestic gold mine output is, without a doubt, much higher than reported. Actual gold mine output could easily be close to 400 tons and possibly more for the following reasons:
The China Gold Association (CGA) numbers reflect production by their members only — but omit gold mined by non-members. These include many small, unofficial mining operations some of which are illegal existing in the "underground economy". The CGA data also excludes production from mines owned and operated by the military, which is significant according to sources. Not to be overlooked is by-product output from copper, silver, and other metal mining activity. Again, this is significant though hard to know just how significant.
In addition to mine output, analysts and commentators seem to forget about secondary supply — that is from recycling of jewelry, investment bars, and industrial scrap. Just to get an "order-of-magnitude" possibility, in recent years global secondary supply from scrap recycling has contributed roughly one-third of total worldwide supply. If scrap contributed only five or ten percent of China’s total gold supply it would still be quite important.
Next, Western analysts are estimating that China’s total gold imports last year were around 490 tons — but no one talks about "illegal" imports — that is gold smuggled into China. We know smuggling is quite significant in some countries — Vietnam and India, for example. We can only imagine how many tons of gold in the form of tael bars, wafers, coins, investment-grade jewelry, etc. is carried into China each year by travellers and professional smuggler
More…
Junior Resources Companies Set to Outperform? Source: Frank Holmes, U.S. Global Investors (1/27/12)
In volatile markets, small stocks typically lag larger companies as investors flee what they perceive to be risk. However, this love affair with large caps is generally short-lived, as investors return to the beaten-up small caps when the turmoil subsides. Historically, small caps have outperformed their larger counterparts.
In 2011, junior miners were shunned, but Global Resources Fund (PSPFX) co-portfolio managers Evan Smith and Brian Hicks pointed out to me this week that we’re beginning to see signs of small-cap strength.
This chart compares the performance of the S&P TSX Venture Index (TSX), which holds a basket of junior resources stocks, to the returns of the Morgan Stanley Commodity Related Index (CRX). You can see that the junior stocks began to outperform around July 2010 and carried that momentum over a period of six months, reaching a high in March 2011. That’s when investor took a turn for the worse and volatility began picking up, sending the TSX tumbling compared to the CRX.
The TSX versus the CRX measure hit a low on Dec. 14, well below the historical average. In technical terms, the Dec. 14 level was 1.37 standard deviations below the two-year mean. Small caps have only received this level of punishment a little more than 10% of the time over the past two years.
More…
Dear Jim,
Your most recent interview with Ellis Martin was amazing. I’ve listened to it carefully twice to make sure I was taking everything in. I remember thinking it seemed extremely fishy when they were talking about a 50% haircut on Greek debt and it was announced that would not be a CDF triggering event. As usual, you have made it crystal clear how this has come about. It was amazing (disgusting?) to see who makes up the voting members on the ISDA Determinations Committees. Also, based on a Q&A the ISDA issued on the Greek debt crisis, it appears there is no mechanism for appeal. Ridiculous.
CIGA Richard
Public Policy Choice: Deal With Consequences Today or Maintain the Peace & Deal With Them Later? CIGA Eric
State and local governments have the following choice:
(1) Maintain or increase the trend towards public spending cuts enacted Q3 2009 (see chart 1). While this choice plays well in the headlines, it carries various consequences ranging from social unrest to economic contraction, or
(2) The return public spending policies. The return of public spending will likely maintain “the peace” and support economic growth, but it represents only a temporary solution to the severe problem of unsustainable and unserviceable debt burdens.
Chart 1: Government Consumption Expenditures and Gross Investment (GCEI) As A %GDP Average from 1947
State and local governments must also realize that once the market has decided public deficits are no longer sustainable, the above choices will no longer affect market consequences. A downside break of the formula’s continuation pattern will mark that point of policy irrelevancy.
Chart 2: US Federal Budget (Surplus or Deficit As A % of GDP, 12 Month Moving Average) and Gold London P.M. Fixed
Headline: California at Risk of Running Out of Money by March
California needs to come up with more than $3 billion to avoid burning through its cash by March, according to the state controller, who urged borrowing and delaying some payments.
"Assuming no additional revenue loss, erosion of borrowable internal funds, or significant spikes in spending, $3.3 billion of cash solutions are needed to address California’s liquidity needs during this period," State Controller John Chiang said in a letter to the chairman and vice chairman of the Joint Legislative Budget Committee released on Tuesday.
Chiang said California does not need to issue IOUs again as it did during a cash crunch in 2009 or delay tax refunds, noting he has developed a plan with the state treasurer’s office and the state’s finance department that would postpone some payments and borrow from external sources and from state accounts to bolster the state’s cash.
Source: cnbc.com
More…
Jim,
According to the Swiss Newspaper, Le Temps, I understand that Swiss Competition Commission (COMCO) received a denunciation from an insider ("auto-dénonciation").
The probe involves UBS and Credit Suisse, as well as Bank of Tokyo-Mitsubishi UFJ, Citigroup Inc., Deutsche Bank Aktiengesellschaft, HSBC Holdings plc, JP Morgan Chase & Co., Mizuho Financial Group Inc., Rabobank Groep N.V., Royal Bank of Scotland Group plc, Société Générale S.A., and Sumitomo Mitsui Banking Corporation.
Other news in English:
Banks suspected of cartel activity
Libor Probe in Switzerland Examines, UBS, Credit Suisse, 10 Other Banks
Best regards,
CIGA Christopher
Christopher,
My goodness, how could you ever think these Banksters would do such a thing? Tisk-tisk, or in India, che-che.
Jim
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