OPEC Has Lost The Power To Lower The Price of Oil

There’s been a lot of excitement in the past year over the rise of North American oil production and the promise of increased oil production across the whole of the Americas in the years to come. National security experts and other geo-political observers have waxed poetic at the thought of this emerging, hemispheric strength in energy supply. What’s less discussed, however, is the negligible effect this supply swing is having on lowering the price of oil, due to the fact that, combined with OPEC production, aggregate global production remains mostly flat.  But there’s another component to this new belief in the changing global landscape for oil: the dawning awareness that OPEC’s power has finally gone into decline. You can read the celebration of OPEC’s waning in power in practically every publication from Foreign Policy to various political blogs and op-eds.

There Can Be Only One: China Sovereign Wealth Fund Says Renminbi Will Become Reserve Currency

First the CIC stirs havoc in Europe, saying it would rather invest in Africa than in Brussels finmin summit caterers, which at this stage in the business cycle are the most profitable corporation imaginable... and now this:

CIC'S JIN SAYS RENMINBI WILL BECOME GLOBAL RESERVE CURRENCY

Naturally, to parahprase titles of cheesy 80s movies, there can be only one. So what would happen to the current one? Maybe the same as what happened to all the prior global "reserve" currencies...

The World's Biggest Hedge Fund Hotel Just Got Bigger - 226 Hedge Funds Owned Apple As Of March 31

According to some estimates, there are currently about 500 hedge funds in the world with AUM over $100 million. This means that roughly half of these asset managers collected performance and management fees for one simple task: to hold AAPL stock. According to the latest just released Hedge Fund Tracker from Goldman Sachs, a record high number of hedge funds, or 226, were long AAPL stock as of March 31, just days ahead of its all time highs, in what can only be described as the world's biggest hedge fund hotel (California). Because the only thing that is roughly comparable to the chart of the recently parabolic move higher in the AAPL stock is the number of hedge funds holders: 216 at the end of 2011, 209 at the end of Q3, 181 at the end of Q2, 173 at the end of Q1 2011, and so on. And while they may all be long the stock for their own "fundamental" reasons, the reality is that whenever there is a scramble for safety, on margin calls or simply due to general Risk Off behavior, it is the winners that would get sold, as selling beget selling, and eventually liquidations. Only in this case, 226 hedge funds all have the same winner. So far the AAPL drop has been relatively benign, not least of all because the stock is the NASDAQ, which just happens to be the growth frontrunning of the 2012 stock market. But what happens if the Fed continues to push off the NEW QE announcement: just how much of a general collateral redemption onslaught can the said hotel withstand before its tenants all scramble to leave at the very same time?

Egan Jones downgrades Spain/Papademos threatens to exit Greece from EU/

Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 2 hours ago

Good evening Ladies and Gentlemen: Gold closed today down $12.00 to finish the comex session at $1576.40. Silver finished the day at $28.17 down 13 cents. Late in the day, rumours starting swirling the globe that Greece will exit the Euro.  Immediately the eur/usa cross fell to 1.266 and the Dow fell from positive territory for a loss of 50 points. It then rebounded with a hail Mary

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Gold Daily and Silver Weekly Charts - Schlock and Awe

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SP 500 and NDX Futures Daily Charts - More of the Same

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Is Facebook A Bigger Ponzi Scheme Than Madoff?

Dave in Denver at The Golden Truth - 6 hours ago

*Facebook is turning out to be the poster child for everything that is corrupt on Wall Street. From fraudulent representation of financials to the fleecing of widows and orphans.* The Facebook stock offering was priced at $38 per share, giving it a $104 billion market cap. Before the stock freed up to trade, Bloomberg News' Trish Regan tweeted that the opening indication was in the $53-$55 range. No doubt she was just regurgitating the fraudulent representation of the demand for the stock from her "sources" at Morgan Stanley, the book-runner for the deal. The opening trade wa... more » 

 

Greyerz - Customer Shocked “Allocated” Gold Not in Swiss Bank

Eric De Groot at Eric De Groot - 7 hours ago

The risk of have gold in the banking system is major. The practice of hypothecation exposed by the recent collapses of Lehman Brothers and IMF Global hint at possible outcomes for paper claims to physical gold. Headline: Greyerz - Customer Shocked “Allocated” Gold Not in Swiss Bank Today Egon von Greyerz told King World News that a client went to move a significant amount of... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 



 

Is Nasdaq Lying About What It Knew On FaceBook IPO Day?

Minutes ago we reported that as the WSJ broke an hour ago, the Nasdaq has pronounced a retroactive mea culpa, claiming that had it known back then what it knows now, namely the plethora of technical glitches plaguing its systems, that it would have simply called the whose FaceBook IPO off. Yet we wonder: is the NASDAQ lying? The reason why we are suspicious that the exchange knew all too well just how badly it was overloaded, is the following stunning report from, who else, Nanex, which shows that for a period of 17 seconds, just around the time the FaceBook IPO launched for trade, all "quotes and trades from reporting exchange NASDAQ for all NYSE, AMEX, ARCA and Nasdaq listed stocks completely stopped." In other words: full radio silence. Or, as Nanex wonders, did "Nasdaq panic and reboot major systems to gain control over High Frequency Trading, just before the FB open of trading?" If so, not only was Nasdaq fully aware of the fully technical glitchiness of its systems, but it may well have precipitated even more confusion and more trading errors, resulting in the two hour trade confirm delays first reported on Zero Hedge, all in a mad dash and epic scramble to avoid reputational and monetary damage at the expense of investors.

"Retroactive Market Conditions": Nasdaq Says Would Have Called Off FaceBook IPO If It Knew Then What It Knows Now

First of all, let's get one thing straight: if instead of about to breach a 20-handle, the Facebook stock price was in the $60, nobody would care about anything that happened in the past 3 days, everyone would be happy and delighted, and increasing the velocity of money with the comfort that some greater fool would be willing to pay even more for ridiculous overvalued ponzi, pardon, portfolio holdings. Alas, we are not there, and as a result, the fingerpointing phase has come and gone. Now come the lawsuits, because people, led to believe in huge short-term profits, are now faced to face with a grim sur-reality in which the tooth fairy was just exposed as the cookie monster. And the latest farcical development: Nasdaq finally pulling market conditions, but not just any market conditions - retroactive ones.

The Facebook Maginot Histogram - Here Is How Morgan Stanley Just Gave Up

Update:  well, our feeling was correct:

MASSACHUSETTS SUBPOENAS MORGAN STANLEY OVER FACEBOOK
MASSACHUSETTS SEEKS MS COMMENTS TO INSTUTIONAL INVESTORS ON FB
MASSACHUSETTS SUBPOENAS MORGAN STANLEY OVER FACEBOOK COMMENTS

It is by now well-known that certain large banks were heavy defenders (by mandate and then by sheer panic) of the Facebook share price post-IPO. Margin Stanley appears to have been the name of choice for this defender and today's price action suggests that whether it was them or not - whoever it was just gave up their undying defense. The following volume profile (how many shares were traded at each price point since the share's release) illustrates dramatically the massive bid-side presence (remember there are no short-sellers per se) as they defended first $42 (78mm shares bid), $41 (11.6mm shares bid), $40 (18.4mm shares), $39 (3.9mm shares), $38.50 (6.5mm shares), and finally $38 (22.7mm shares bid) before the first day or two were over. This is at least 140mm shares that were bid for above the volume-weighted average price of $37.98 across all 844mm trades that have occurred since Facebook began trading on NASDAQ. $32.1bn of trading volume across the three days. It appears that today's action - which seemed to be left undefended as algos were in charge was the breaking point for MS.

Facebook Plummets To All Time Lows As EUR Exodus Crushes Commodities, Slams Stocks

It was all going to plan until that early angst from Egan-Jones Spain downgrade was increased by L-Pap's 'sky-is-falling' Greek exit plans comments. Treasuries had leaked higher in yield and recoupled with stocks (after the divergence yesterday) but the USD (driven by EUR deterioration) was pushing higher (diverging from its recent correlation). This was dragging commodities lower but gently as stocks (especially financials) continued their dead-cat impressions. Even Facebook showed signs that the deluge of reality was coming off its shoulders. By the European close, stocks had pulled unhealthily high relative to risk-assets in general (once again) and credit was lagging a little. The Spain downgrade news stalled the EUR which began to slide - as did Gold and Silver along with USD strength - but Treasuries kept on limping higher in yield and tracking stocks, Then in the last hour of the day the L-Pap headlines - along with an increasing sense of deceleration (we saw heavy volume come in just after the European close - suggesting covering of the heavy volume up from the bounce lows yesterday) - and all the momo names started to lag with AAPL losing steam (more schadenfreude there after our comments yesterday) and then financials stumbled off their exuberant highs (though JPM managed a very good gain of over 4.5% still - as IG9 compressed for the first time in a few weeks). S&P 500 e-mini futures (ES) managed only a small loss but all the positive momentum was lost and large average trade size pressure came in at the close as it tried to get up to VWAP. VIX gained 0.5vols to close back above 22.5% and the term structure bear-steepened a little more. Yesterday's credit-led strength faded today, as skews normalized, with HYG losses and a renewed fear of the ETFs and indices leaking into the real bond market soon once again. Clusterbook is trading $30.80 after-hours with over 101mm shares traded!

Arbitrage Pair Du Jour: Compress EURUSD vs Italy Bonds

It has been a while since we have seen any clearly actionable compression (or divergence) trade opportunities in a market that so far in 2012 been abused almost exclusively by central planners and robots. However, today we believe it is time to point out what appears to be a very distinct arb pair: specifically, the divergence between the EURUSD and the Italian-Bund spread. As can be seen on the chart below, the first time we saw a material divergence between the two very tightly correlated series was in mid-March when the phase out of LTRO2 spooked the FX market but still left enough dry powder at Italian banks to provide a fake support for Italian bonds. That did not last long, and the subsequent month saw another push wider in Italian (and Spanish, and all other PIIG) spreads to Bunds, however not wide enough. It appears that a long EURUSD vs. short Italian bonds (or rather Italian-Bund spreads widening) here could provide for substantial alpha, with either roughly 300 pips in EURUSD upside, or nearly 75 bps of Italian spread upside once the dust settles and the two series reconverge.

EUR Plunges On Late Day L-Pap Scaremongering

With G-Pap talking of federalism all morning at Zeitgeist, the M.A.D. button was just pressed again by L-Pap as only minutes after we hear of a drop-in-a-bucket EFSF rescue fund for Greek banks, Dow Jones notes:
Preparations for Greece Euro Exit Considered, Papademos Says: DJ

In The News Today

May 22, 2012, at 1:25 pm
by Jim Sinclair in the category In The News |  Print This Post |  Email This Post

Dear CIGAs,
Here is an end of the day message to you all, my extended family:
We will prevail. About that there is no question.
Relax and be happy.
Jim

Jim Sinclair’s Commentary

The degraded financial world we live in makes this is a must listen to.
Evil is so prevalent that we are near the end of it. Evil this prevalent cannot be tolerated by nature. It never has been and never will be.
Tradition has always held that when evil reins as it does today, nature produces an end.

Facebook Bankers Secretly Cut Facebook’s Revenue Estimates In Middle Of IPO Roadshow By Henry Blodget
Click here to watch the video…



Jim Sinclair’s Commentary

A view from the London Tower.

"It is no exaggeration to say that since the 1980s, much of the global financial sector has become criminalised, creating an industry culture that tolerates or even encourages systematic fraud. The behaviour that caused the mortgage bubble and financial crisis of 2008 was a natural outcome and continuation of this pattern, rather than some kind of economic accident.
This behaviour is criminal. We are talking about deliberate concealment of financial transactions that aided terrorism, nuclear weapons proliferation and large-scale tax evasion; assisting in major financial frauds and in concealment of criminal assets; and committing frauds that substantially worsened the worst financial bubbles and crises since the Depression."
Link to full article…

Jim Sinclair’s Commentary
The following table is on page 73 of the 82 pages of the last NY Fed ‘stress’ test for JPM.

The report showing the huge losses for Morgan that so far have not been discussed is sourced below (Click image to open link).





Jim Sinclair’s Commentary

The back door is shutting.

US citizens now one step closer to becoming permanent tax slaves Simon Black
May 22, 2012
This week, the universally stupid brainchild of US Senators Chuck Schumer and Bob Casey known as the Ex-PATRIOT Act inched a bit closer towards becoming law.
‘Ex-PATRIOT’ is an absurd acronym that stands for “Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy”. I call it the Tax Slave Act… and it proposes three key provisions:
1) Individuals who are deemed, in the sole discretion of the US government, to have renounced US citizenship in order to avoid US taxes, will be permanently barred from re-entering the United States.
2) Such individuals will also be required to pay a 30% capital gains tax to the United States government on ALL future investment gains derived from the US. Currently, non-citizens who do not reside in the US pay no US capital gains tax.
3) These proposals are RETROACTIVE, and, if passed, would apply to anyone who renounced his/her citizenship within the last 10-years.
During a Sunday interview with ABC News, House Speaker John Boehner threw his support behind the bill… certainly a big step towards its eventual passage.
Let’s pause briefly for a little history lesson–
Dart Container Corporation was founded in 1960 by William F. Dart, the man who first perfected the design of styrofoam. Dart Container is today a multi-billion dollar family-owned company with thousands of employees and operations around the world.
More…





Jim Sinclair’s Commentary

The MOPE is maddening concerning the intentions of the Federal Reserve, the actions of the Federal Reserve, the non-recovery of US economics, the down-turn in Europe and the resolution of the euro situation.
All we can do is watch this as if it was a television show called “The World’s Dumbest.”
QE is going to Infinity.
Whatever money is required in Europe, be it to transition weak members, or hold the show together, it will be supplied primarily by the Federal Reserve.
Liquidity floats all boats, be it equity, gold equity or gold.
Relax and stay centered as this cloud of furiously confusing counter opinions is hammered out by MSM.

Secret Central Bank Aid Props Up Greek Banks Published: Monday, 21 May 2012 | 11:18 PM ET
By: Ralph Atkins in Frankfurt
There has been no official announcement. No terms or conditions have been disclosed. But Greece’s banking system is being propped up by an estimated €100 billion or so of emergency liquidity provided by the country’s central bank — approved secretly by the European Central Bank in Frankfurt. If Greece were to leave the eurozone, the immediate cause might be an ECB decision to pull the plug.
Extensive use of “emergency liquidity assistance” (ELA) to help banks in the weakest economies has been one of the less-noticed features of the eurozone crisis. Separate from normal supplies of liquidity and meant originally as a temporary facility for national authorities to use when banks hit problems, ELA proved a lifesaver for the financial system Ireland and is now even more so in Greece. As such, it has given the ECB — which has ultimate control over the facility — considerable power to determine countries’ fates.
Whether that power would ever be exercised is unclear. ELA is a subject on which the ECB is deeply reluctant to provide information — even on where or when it is provided.
“You don’t say when you are in an emergency situation, because then you make the situation worse. So I really don’t see the usefulness of being more transparent,” Luc Coene, Belgium’s central bank governor, explained in a Financial Times interview this month.
The ECB’s guard slipped a little late last month. Its weekly financial statement published on April 24, showed an unexpected €121 billion increase in the innocently titled heading “other claims on euro area credit institutions,” the result of putting all ELA under the same item. By definition, €121 billion was the minimum amount of ELA being provided by the “eurosystem” — the network of eurozone central banks.
By scouring ECB and national central bank statements analysts, have since pieced together more details. Analysts at Barclays, for instance, reckon Greece is now using €96 billion in ELA, with Ireland accounting for another €41 billion and Cyprus €4 billion. If correct, total ELA in use has exceeded €140 billion — more than 10 per cent of the amount lent to eurozone banks in standard monetary policy operations.
Because of the risks of extra liquidity creating inflation, ELA in excess of €500 million requires approval by the ECB’s 23-strong governing council: its use can be stopped if two-thirds of the council oppose an application.
More…





Jim Sinclair’s Commentary

MOPE reaches for the moon.

NYTimes: Lyme Disease To Blame For JPM Trading Misstep By JESSICA SILVER-GREENBERG and NELSON D. SCHWARTZ
Published: May 19, 2012
Ever since JPMorgan Chase disclosed a multibillion-dollar trading loss this month, the central mystery has been how a bank known for its skill at risk management could err so badly.
As early as 2010, the senior banker who has been blamed for the debacle, Ina Drew, began to lose her grip on the bank’s chief investment office, according to current and former traders. She had guided the bank through some of the most rugged moments of the 2008 financial crisis, earning the trust of Jamie Dimon, JPMorgan’s chief executive, in the process.
But after contracting Lyme disease in 2010, she was frequently out of the office for a critical period, when her unit was making riskier bets, and her absences allowed long-simmering internal divisions and clashing egos to come to the fore, the traders said.
More…





Jim Sinclair’s Commentary

QE to infinity here and there.
Do not be dumbed down by the violent MSM MOPE campaign to the contrary.

Lagarde praised the Bank of England’s £325bn quantitative-easing scheme, which she said had proved a key support for the UK economy, but urged it to go further and consider further base rate cuts, more QE and a wider range of credit schemes to boost direct lending.
IMF backs tax and interest rate cuts to dig UK out of recession guardian.co.uk, Tuesday 22 May 2012 14.14 BST
Speaking at the Treasury, Christine Lagarde, head of the International Monetary Fund, says Britain should be willing to make tax and interest rate cuts Link to this video
The chancellor, George Osborne, came under pressure on Tuesday after the International Monetary Fund warned that Britain should prepare a Plan B to prevent the economy from diving further into recession.
In its annual review of the UK’s economic record, the IMF said the Treasury should be ready to make temporary tax cuts to kickstart the economy because the weak recovery may be "more protracted than previously anticipated".
Christine Lagarde, IMF managing director, said: "Growth is too slow and unemployment, including youth unemployment, is too high. Policies to bolster demand before low growth becomes entrenched are needed."
She added: "If the economy turns out to be significantly weaker than forecast, fiscal easing should be considered."
The warning comes only weeks after the UK slid into its second recession in three years amid a host of surveys that showed declining business and consumer confidence.
More…

 

Jim’s Mailbox

May 22, 2012, at 1:10 pm
by Jim Sinclair 

Jim,

Apparently, Fukushima, Japan is about to have a serious problem in Reactor 4 today! It can go if the storms off the coast land. The press has covered up how bad the nuclear meltdown aftermath is in Japan. The implications of this… I don’t even want to think about.
Click here to read the article…

Thank you for all the sacrifice and extreme wisdom you have imparted to me over the many years.
CIGA Anastasia



JPMorgan Chase loss only going to get worse CIGA Eric
While market force should open a can of whoop ass on JPMorgan, they’ll likely be contained by the mutual assured destruction principle known as "too big too fail" in the financial world.  The derivative closet bulging with so many skeletons no longer latches shut.
The number being bandied about now is closer to a range of $6 billion to $7 billion, according to several people working on trading desks that specialize in the derivatives JPMorgan Chase (JPM, Fortune 500) used to make its trades and from two sources with knowledge of the bank’s positions.
Headline: JPMorgan Chase loss only going to get worse
NEW YORK (CNNMoney) — One thing seems clear about JPMorgan Chase’s $2 billion loss. It’s no longer $2 billion. It’s likely much higher. The number being bandied about now is closer to a range of $6 billion to $7 billion, according to several people working on trading desks that specialize in the derivatives JPMorgan Chase (JPM, Fortune 500) used to make its trades and from two sources with knowledge of the bank’s positions. JPMorgan Chase declined to comment on its trading activities. Of course, it is impossible to know with absolute certainty just how high the losses are at any given moment. But experts said there are few scenarios in which hedge funds on the other side of the bank’s giant bet will let JPMorgan Chase out of it without significantly more pain. "The market knows roughly what [JPMorgan] has and what the sizes are," said a source with knowledge of the bank’s positions. Why have the losses grown since chief executive officer Jamie Dimon informed the public of them? The market’s overall slide hasn’t helped.
Source: money.cnn.com
More…



Dear Jim,
If you were the US President or the Treasury Secretary, what are the three (or more) steps, in priority order, you would take right now to move this country in the right direction regardless of the politics involved to avoid a potential mega-disaster looming in the near future? I trust your wisdom and your keen sense of the current world affairs and hence I am sure your response would be for the greater good of this nation and its citizens.
You may have already answered this at JSMineset.com. If so, I missed it. Thank you so kindly for your time.
Respectfully,
CIGA SNC

SNC,
If I held any of these positions none of this would have ever happened.
I was short listed under Nixon for Secretary of the US Treasury according to the NYT.
There is NO practical solution now. The operative word is practical.
Jim