Tax-Arbitrage Of The Year - Facebook Founder Renounces US Citizenship
We can only guess at his reasons. Perhaps it is the cost of real estate in Palo Alto, the price of Starbucks in Silicon Valley, or the lack of Bugatti dealerships but Eduardo Saverin - co-founder of Facebook - just renounced his US citizenship. Via Bloomberg,
FACEBOOK CO-FOUNDER SAVERIN GIVES UP U.S. CITIZENSHIP PRE-IPO
Or maybe the always pioneering entrepreneurs from Facebook just gave us a preview of US tax policy, or rather the popular response to it, in 2013. Like!
Santelli On CDS Regulation And Why Bank Analysts Failed
It
would seem, just as during the crisis in 2008/9, that now might be an
opportune time to push for 'improvement' in how banks are regulated
(and more importantly how the instruments they trade in colossal size
are priced and marked-to-market). Rick Santelli believes now has never
been a better time but as his guest Tim Backshall of Capital Context notes, regulation of the CDS market can be summed up in one sentence "Get Them On Exchange".
Something we have been saying for years (and has been tried before)
but with dealers holding all the keys (to market-making) and exchanges
cowering for fear of losing clients, we remain less optimistic. Santelli and Backshall
critically address the complicity of banks, regulators, analysts, and
The Fed in giving 'banks the benefit of the doubt' with regard their use
of the bottomless pit of capital they implicitly have but
what is more important is for the hordes of sell-side analysts and
buy-side sheeple to understand just what this JPM debacle exposes about
bank risk (VaR is useless), bank transparency (mark-to-model or worse
is widespread), and bank valuation (traditional Price/Book metrics have
no merit anymore).Deja Deja Deja Deja Deja Vu
Dump-'em, Pump-'em, Dump-'em
- The New Normal 'buy-and-hold' model is stable this week. Equity
market continued to follow the same path day-in and day-out this week
as the distance between the 50DMA and Monday's morning gap becomes
smaller and smaller. Meanwhile in credit-land, investment grade indices have been Iksil'd.The Financial World's Worst Nightmare
Dave in Denver at The Golden Truth - 58 minutes ago
*"We're getting to the heart of why you own gold*" - long time friend and
colleague,
Wistar Holt (Holt & Shapard Capital Mgmt)
I think every useful blog under the sun has re-hashed the JP Morgan/Jamie
Dimon bombshell dropped on the market last night, so I'm going to try to be
brief, to the point and hopefully add some "color" and information that is
new.
First, Jamie Dimon did a superb job of throwing very expensive, opaque
lipstick on the world's ugliest pig and catering the to the Wall Street
analysts and media who take what he says and spin it to the public in ... more »
Greece Next Next Steps
With
the Greek tempest-in-a-teapot about to hit Whale-size, as Tsipras says
he will not join the coalition and Venizelos says that Syriza's
participation is a prerequisite (via Bloomberg), it seems now would be
an opportune time to look forward (not backward at the GGB2s dropping
below EUR17 for the first time ever!). As we were among the first to
state that their would be a second (if not more) election in Greece, we
look at the schedule of events in Europe over the next few weeks (including the payments due on the PSI holdout bonds), and discuss the scenarios and consequences of a Greek exit (for both Greece living without Euro support and the Euro-zone coping with a Lehman-event).The ‘Dumbest Person Of The Week Award’ Goes To…
Former US Republican presidential candidate Michelle Bachmann receives the Sovereign Man dumbest person of the week award for obtaining… then almost immediately renouncing… Swiss citizenship. I’ll explain: Bachmann’s husband is a Swiss national; they’ve been married since 1978, and as a result, Bachmann eventually became qualified for Swiss citizenship as well. She recently received confirmation of her citizenship from the Swiss authorities, a fact that was reported in some mainstream media outlets. Bachmann was subsequently criticized by her political opponents for engaging in such ‘un-American’ activities.Visualizing Europe's "Ponzi Patriotism"
Zero
Hedge has a habit of trying to simplify that which is otherwise
unnecessarily complex, convoluted and opaque. Today, we wish to explain
the primary reason why Europe has still not be engulfed in fire and
brimstone and collapsed straight to the 9th circle of overlevereged
Hell(as). The reason, as we henceforth dub it, is Ponzi PatriotismTM.Today’s Items:
If the European Financial Stability Fund
was a collateralize debt obligation, the European Central Bank
increasingly resembles a highly leveraged bank. The European Central
Bank balance sheet is now around 3 trillion euros, an increase of about
30 percent since November. This government sponsored ponzi scheme will
end.
Remember when China effectively stopped
buying U.S. debt for the safety of buying EU debt? With the accelerating
crisis in the EU, how things have changed. Perhaps the U.S. Treasury
should say no to China if they want to start buying our debt again. That
will teach them.
China has exceeded Peru and Mexico and become the world’s leading producer of silver
and is also the second-largest consumer of the precious metal after the United States.
With the opening of the Shanghai Futures Exchange, the corrupt CME, now has some real competition. In that, as the West sells, the East will buy at cheap prices.
and is also the second-largest consumer of the precious metal after the United States.
With the opening of the Shanghai Futures Exchange, the corrupt CME, now has some real competition. In that, as the West sells, the East will buy at cheap prices.
Total March U.S. exports were $186.8
billion and imports were $238.6 billion which resulted in a goods and
services deficit of $51.8 billion, up from $45.4 billion in February.
For the three months ending in February, the average trade deficit was
$49.5 billion.
The number of Americans, who filed
requests for jobless benefits, fell by 1,000 last week to 367,000. At
least until they are revised upwards next week. For example, claims from
two weeks ago were revised up to 368,000 from 365,000. That aside,
according to Gallop, 32 percent, or nearly one in three young Americans,
ages 18 to 29, are underemployed.
Lawmakers, my home state of Texas, have
been caught red-handed, and not punished, by voting multiple times for
legislative bills. You can be assured, that other state lawmakers,
inside and outside of Texas, are doing the same as well. If voting
integrity by state legislators is non-existent, then you can be assured
that the whole voting system is absolutely broken.
If you believe that you do not have what
it takes to endure what is coming, then take a look at this inspiring
video. We all have the power, if we put in that extra amount of energy,
to get through rough times and be on top. The more you think of giving
up, think of the reason you started and held on for so long.
A quick note on the disastrous news emanating from J.P. Morgan Chase, whose unflappable (well, unflappable until yesterday) CEO Jamie Dimon yesterday disclosed that the bank suffered $2 billion in trading losses this quarter.
Here’s the summation from the New York Times:
Jamie Dimon, the chief executive of JPMorgan, blamed “errors, sloppiness and bad judgment” for the loss, which stemmed from a hedging strategy that backfired.I’m still not entirely clear on what the trades by Bruno Iksil, the so-called “London Whale,” were exactly. According to the excellent Felix Salmon at Reuters, Iksil had taken a massive long position on corporate CDS, and when word of this leaked out, the market turned on him and beat his brains out.
The trading in that hedge roiled markets a month ago, when rumors started circulating of a JPMorgan trader in London whose bets were so big that he was nicknamed “the London Whale” and “Voldemort,” after the Harry Potter villain.
Read More @ RollingStone.com
from Fox News via, Matlarson10:
from Silver Vigilante:
At this point, evidence is mounting that the illuminist
internationalists in the financial sectors and their media-tycoon
spokesperson’s are doing everything they can to abet an across-the-board
selloff in financial markets, with attempts made by news media outlets
to say
markets are falling when they are steady and the most recent
announcement at J.P. Morgan that they are sustaining major trading
losses.
The casino gulag prison guard bank, JP Morgan, has again mismanaged their free money from the Federal Reserve. Whilst mainstream reports tout trading losses as the reason for the glut, perhaps a continuation of lavish partying or even getting it on with the boys over at Morgan Stanley with under-age prostitutes has led to, at least, some of the losses.
Read More @ SilverVigilante.com
At this point, evidence is mounting that the illuminist
internationalists in the financial sectors and their media-tycoon
spokesperson’s are doing everything they can to abet an across-the-board
selloff in financial markets, with attempts made by news media outlets
to say
markets are falling when they are steady and the most recent
announcement at J.P. Morgan that they are sustaining major trading
losses.The casino gulag prison guard bank, JP Morgan, has again mismanaged their free money from the Federal Reserve. Whilst mainstream reports tout trading losses as the reason for the glut, perhaps a continuation of lavish partying or even getting it on with the boys over at Morgan Stanley with under-age prostitutes has led to, at least, some of the losses.
Read More @ SilverVigilante.com
by J. D. Heyes, Natural News:
There’s
plenty of economic uncertainty to go around these days, and most of us
know that the banking industry has taken it on the chin these past few
years. But is it so bad that it’s time to start stuffing mattresses with
cash? Yes, say an increasing number of Americans.
As the economic morass continues on a number of levels for tens of millions of Americans more than four years after the collapse of the housing and financial sectors, uncertainty over what the future will bring is on the rise. Though some economists will tell you that “things are getting better,” more and more people aren’t buying that.
Safes, in fact, are becoming high-demand items, according to some reports, with retailers reporting a 40-percent increase in sales and installation from just a few years ago. And they aren’t taking the shape of the typical boxy, square obvious-looking safe. Instead, a sort of boutique safe business has sprung up, giving people a wide range of options for where they can stash their cash.
Read More @ NaturalNews.com
from AltInvestorsHangout:
There’s
plenty of economic uncertainty to go around these days, and most of us
know that the banking industry has taken it on the chin these past few
years. But is it so bad that it’s time to start stuffing mattresses with
cash? Yes, say an increasing number of Americans.As the economic morass continues on a number of levels for tens of millions of Americans more than four years after the collapse of the housing and financial sectors, uncertainty over what the future will bring is on the rise. Though some economists will tell you that “things are getting better,” more and more people aren’t buying that.
Safes, in fact, are becoming high-demand items, according to some reports, with retailers reporting a 40-percent increase in sales and installation from just a few years ago. And they aren’t taking the shape of the typical boxy, square obvious-looking safe. Instead, a sort of boutique safe business has sprung up, giving people a wide range of options for where they can stash their cash.
Read More @ NaturalNews.com
from AltInvestorsHangout:
By Catherine Austin Fitts, Solari:
This week, we have a “double-header!” It’s time for the Precious Metals Market Report.
Franklin Sanders has also agreed to join me for the 1st Quarter Wrap
Up. I wanted to wait until I had returned from Europe, as events on the
east side of the Atlantic are so critical to all of us.
After we cover the precious metals markets and your questions on gold and silver and I describe why Warren Buffet is wrong about gold, Franklin and I will review the overall trends, including:
This week, we have a “double-header!” It’s time for the Precious Metals Market Report.
Franklin Sanders has also agreed to join me for the 1st Quarter Wrap
Up. I wanted to wait until I had returned from Europe, as events on the
east side of the Atlantic are so critical to all of us.After we cover the precious metals markets and your questions on gold and silver and I describe why Warren Buffet is wrong about gold, Franklin and I will review the overall trends, including:
- Overview: the Top Trends
- Reengineering Europe
- American Renaissance: Fact or Fiction?
- The Violence of Food Wars
- Elections & (Gulp!) Postponed for Post-Election
- New Frontiers: Science, Technology & Space
- Wildcards
- The Search for New Models: Is It Decentralizing? Is it Wealth Building? Read More @ Solari.com
by Greg Hunter, USAWatchdog:
If
you think gay marriage or Mitt Romney’s alleged forced haircuts when in
prep school are the big stories you need to worry about, then you are
watching too much of the mainstream media! There are much bigger
stories folks should be paying attention to. Let’s
start with the Fukushima Diiachi nuclear power plant in Japan that is
still not under control. It is far from over, and at least one U.S.
Senator from Oregon is sounding the alarm. Ron Wyden is not only asking
the Obama administration to get involved but the entire global
community. If this blows up again, there would be 85 times more
radiation than Chernobyl. This could cause extreme sickness and
millions of deaths worldwide. The USA is directly downwind from
Japan. Europe is the other big story you are not hearing much about.
Economist Nouriel Roubini says the EU and the euro is finished when the
crisis hits Spain and Italy.
Read More @ USAWatchdog.com
If
you think gay marriage or Mitt Romney’s alleged forced haircuts when in
prep school are the big stories you need to worry about, then you are
watching too much of the mainstream media! There are much bigger
stories folks should be paying attention to. Let’s
start with the Fukushima Diiachi nuclear power plant in Japan that is
still not under control. It is far from over, and at least one U.S.
Senator from Oregon is sounding the alarm. Ron Wyden is not only asking
the Obama administration to get involved but the entire global
community. If this blows up again, there would be 85 times more
radiation than Chernobyl. This could cause extreme sickness and
millions of deaths worldwide. The USA is directly downwind from
Japan. Europe is the other big story you are not hearing much about.
Economist Nouriel Roubini says the EU and the euro is finished when the
crisis hits Spain and Italy.Read More @ USAWatchdog.com
by George Ure, UrbanSurvival.com:
Word is coming out this morning (and it may impact markets going into the weekend) that mega-bank JPMorgan was hit for $2-billion in trading losses over the last six-weeks or so.
Word is coming out this morning (and it may impact markets going into the weekend) that mega-bank JPMorgan was hit for $2-billion in trading losses over the last six-weeks or so.
The studious news-watcher will start by looking at some of the company’s financial numbers which Yahoo serves up over here.
A quick review suggests that the company’s $15.1 billion of “enterprise
value” will drop to $13-billion, and since market capitalization is has
been running (very roughly) 10.3 times market cap, we would expect that
multiplier to come down to less than 10 – I could toss 8 or 9 out as
wildly thrown darts – market cap might come down to the $10.5 billion
kind of area, or a stock price decline of 30-35%.
At least one reader is a little suspicious of the “mistakes” claim: “JPM
traders are not dumb – a loss that big seems unlikely to have “just happened”. ‘Course, just could be my paranoia streak showing…“ While “mistakes” sounds plausible, doesn’t seem too terribly likely. So, where’d the money go? Not that the feds will go looking, anymore than they went after MF Global. I mean it is and election year, right? Money just seems to get antsy in here…
Read More @ UrbanSurvival.comtraders are not dumb – a loss that big seems unlikely to have “just happened”. ‘Course, just could be my paranoia streak showing…“ While “mistakes” sounds plausible, doesn’t seem too terribly likely. So, where’d the money go? Not that the feds will go looking, anymore than they went after MF Global. I mean it is and election year, right? Money just seems to get antsy in here…
by Jim Puplava, Financial Sense:
No catalyst for gold until after the November elections
Jim is pleased to welcome back Dr. Jim Walker, Founder and Managing Director at Asianomics Limited
in Hong Kong. Walker sees a likely hard landing for China, and severe
trouble ahead for Europe. He also believes that gold will not react
until after the November presidential elections, when the fiscal
realities of 2013 take center stage.
Asianomics Limited is an economic research and consultancy company servicing principally the fund management industry. Prior to establishing Asianomics in December 2007 he was the chief economist at CLSA Asia-Pacific Markets. He joined CLSA in late 1991. Over the years Dr Jim achieved numerous ‘best economist’ rankings in the Asiamoney, Institutional Investor and Greenwich surveys of fund managers. In the last few years he is best known for forecasting the US 2007 downturn and financial sector meltdown in his series of ‘Apocalypse’ reports.
Click Here to Listen to the Audio
Read More @ Financial Sense.com
No catalyst for gold until after the November elections
Jim is pleased to welcome back Dr. Jim Walker, Founder and Managing Director at Asianomics Limited
in Hong Kong. Walker sees a likely hard landing for China, and severe
trouble ahead for Europe. He also believes that gold will not react
until after the November presidential elections, when the fiscal
realities of 2013 take center stage.Asianomics Limited is an economic research and consultancy company servicing principally the fund management industry. Prior to establishing Asianomics in December 2007 he was the chief economist at CLSA Asia-Pacific Markets. He joined CLSA in late 1991. Over the years Dr Jim achieved numerous ‘best economist’ rankings in the Asiamoney, Institutional Investor and Greenwich surveys of fund managers. In the last few years he is best known for forecasting the US 2007 downturn and financial sector meltdown in his series of ‘Apocalypse’ reports.
Click Here to Listen to the Audio
Read More @ Financial Sense.com
from Liberty Blitzkrieg
I
have to hand it to the Central Planners. They are good. Really,
really good. Of course, they are battling a crippled opponent
considering so much of America consists of lobotomized sheeple, but
nevertheless to be able to steal so much from many people with such
blatant and simplistic methods and not be widely discovered is an act of
devious brilliance. The reason I say this now is because ever since
last fall TPTB have changed tactics and totally taken over the markets
and with it shoved many people into what is best described as a trance.
The people know something is very wrong. They know they are getting
poorer; that life is getting harder, yet the television and the markets
have cloaked a blanket of sedation upon their minds.
Ever since roughly early October 2011 the markets have been fed line after line of carefully crafted bureaucratic garbage couple with tactical market interventions to create reality that they wish to sell. I remember back to those last months of 2011; what it was like. It was pure madness. There would be a crisis and then TPTB would come out with some meeting in the next week or two that would solve everything.
Read More @ LibertyBlitzkrieg.com
from The American Dream:
Did
you know that illegal immigrants all over the United States are using a
massive scam to receive tax refunds from the federal government that
are often in excess of $10,000? It is estimated that 2 million illegal
immigrants are filing fraudulent tax returns each year and that they are
pulling in more than 4 billion dollars in tax refunds every year that
they are not entitled to. They are doing this by abusing the additional
child tax credit and the IRS knows all about it and yet they refuse to
do anything to stop it. Illegal immigrants are filing tax returns that
sometimes claim 10 or 12 nieces and nephews as dependents, and most of
the time those nieces and nephews do not even live in the United States.
So while you and I are being taxed into oblivion, many illegal
immigrants are often pulling in tax refunds that are well into five
figures. At a time when the federal government is absolutely drowning
in debt, this is the type of fraud that desperately needs to be cracked
down on, and yet the IRS refuses to take action.
Read More @ EndOfTheAmericanDream.com
I
have to hand it to the Central Planners. They are good. Really,
really good. Of course, they are battling a crippled opponent
considering so much of America consists of lobotomized sheeple, but
nevertheless to be able to steal so much from many people with such
blatant and simplistic methods and not be widely discovered is an act of
devious brilliance. The reason I say this now is because ever since
last fall TPTB have changed tactics and totally taken over the markets
and with it shoved many people into what is best described as a trance.
The people know something is very wrong. They know they are getting
poorer; that life is getting harder, yet the television and the markets
have cloaked a blanket of sedation upon their minds.Ever since roughly early October 2011 the markets have been fed line after line of carefully crafted bureaucratic garbage couple with tactical market interventions to create reality that they wish to sell. I remember back to those last months of 2011; what it was like. It was pure madness. There would be a crisis and then TPTB would come out with some meeting in the next week or two that would solve everything.
Read More @ LibertyBlitzkrieg.com
Did
you know that illegal immigrants all over the United States are using a
massive scam to receive tax refunds from the federal government that
are often in excess of $10,000? It is estimated that 2 million illegal
immigrants are filing fraudulent tax returns each year and that they are
pulling in more than 4 billion dollars in tax refunds every year that
they are not entitled to. They are doing this by abusing the additional
child tax credit and the IRS knows all about it and yet they refuse to
do anything to stop it. Illegal immigrants are filing tax returns that
sometimes claim 10 or 12 nieces and nephews as dependents, and most of
the time those nieces and nephews do not even live in the United States.
So while you and I are being taxed into oblivion, many illegal
immigrants are often pulling in tax refunds that are well into five
figures. At a time when the federal government is absolutely drowning
in debt, this is the type of fraud that desperately needs to be cracked
down on, and yet the IRS refuses to take action.Read More @ EndOfTheAmericanDream.com
by Adrian Ash, Bullion Street:
London Gold market report
Wholesale market prices to buy gold and silver repeated Tuesday’s rally in London trade after a slight drop Thursday morning, rising back above $1594 and $29.30 per ounce respectively as platinum and palladium also stemmed this week’s sharp drops.
“Technically, many precious metals are now oversold,” says a note from dealers Intl FC Stone, pointing to chart analysis and noting that gold trading volume on the Globex futures platform was 40% above the last month’s quiet average on both Tuesday and Wednesday.
“The price drop was large and quick, Bloomberg quotes analyst Xiang Nan at CITICS Futures Co., calling a rebound in Asia’s wholesale demand to buy gold overnight “not surprising.
Read More @ BullionStreet.com
London Gold market reportWholesale market prices to buy gold and silver repeated Tuesday’s rally in London trade after a slight drop Thursday morning, rising back above $1594 and $29.30 per ounce respectively as platinum and palladium also stemmed this week’s sharp drops.
“Technically, many precious metals are now oversold,” says a note from dealers Intl FC Stone, pointing to chart analysis and noting that gold trading volume on the Globex futures platform was 40% above the last month’s quiet average on both Tuesday and Wednesday.
“The price drop was large and quick, Bloomberg quotes analyst Xiang Nan at CITICS Futures Co., calling a rebound in Asia’s wholesale demand to buy gold overnight “not surprising.
Read More @ BullionStreet.com
by Reggie Middleton, BoomBustBlog.com:
First,
pardon my tardy response to this JP Morgan news. I’m currently in
Europe and was jet-lagged asleep when this popped. Of course,
BoomBustBloggers know that I will be on the case. To begin with, a
summary as pulled from ZeroHedge:
In Corporate, within the Corporate/Private Equity segment, net income (excluding Private Equity results and litigation expense) for the second quarter is currently estimated to be a loss of approximately $800 million. (Prior guidance for Corporate quarterly net income (excluding Private Equity results, litigation expense and nonrecurring significant items) was approximately $200 million.) Actual second quarter results could be substantially different from the current estimate and will depend on market levels and portfolio actions related to investments held by the Chief Investment Office (CIO), as well as other activities in Corporate during the remainder of the quarter.
Read More @ BoomBustBlog.com
from matlarson10:
First,
pardon my tardy response to this JP Morgan news. I’m currently in
Europe and was jet-lagged asleep when this popped. Of course,
BoomBustBloggers know that I will be on the case. To begin with, a
summary as pulled from ZeroHedge:In Corporate, within the Corporate/Private Equity segment, net income (excluding Private Equity results and litigation expense) for the second quarter is currently estimated to be a loss of approximately $800 million. (Prior guidance for Corporate quarterly net income (excluding Private Equity results, litigation expense and nonrecurring significant items) was approximately $200 million.) Actual second quarter results could be substantially different from the current estimate and will depend on market levels and portfolio actions related to investments held by the Chief Investment Office (CIO), as well as other activities in Corporate during the remainder of the quarter.
Read More @ BoomBustBlog.com
from matlarson10:
By Shirley Won, CTV News:
The beating that Sprott Inc.’s shares have taken in recent months may have made them an attractive entry point for investors looking to play a bullish outlook for gold and silver.
Eric Sprott, the firm’s founder and architect of the dominant precious metals theme, is a big believer that the price of gold and silver – as stores of value – will climb as governments debase their currency by printing money to stimulate their economies. While the metals stocks have sharply lagged their bullion peers, the firm argues that these oversold stocks are poised for a rebound.
Read More @ CTV News
Dear CIGAs,
With global investors concerned about key markets, today King World News interviewed legendary Jim Sinclair’s colleague and fellow trader, Dan Norcini. Norcini told KWN that a decisive break below the 1.8% level on the US Ten-Year Note would signal that a tsunami of deflation could engulf the globe. Norcini said this could trigger “a collapse in tax revenue” and budget deficits would “blow out of control.” Here is how Norcini described the precarious situation: “If we see the yield on the US 10-Year Note break below the 1.8% level, what it’s to signal to bond traders around the world is that we have a deflationary wave coming. I think the reason the 1.8% level has been a floor so far is because most traders are convinced the Bernanke-led Fed will not allow deflation to occur.”
Dan Norcini continues:
“If you look at the following weekly chart of the US Ten-Year Note, notice the yield has never closed, on a weekly basis, below the 1.8% level. It has penetrated that level on more than once occasion, but always recovered to close back above that level by Friday.
If we were to see a weekly close below the 1.8% level, that would definitely confirm the market would be expecting a serious bout of deflation. When the Citibank analyst, Fitzpatrick, mentioned in his KWN interview that the US Ten-Year yield could fall to as low as 1.15%, people have to understand that the conditions around the world would have to be absolutely horrific for that to occur (see chart below).
If we hit Fitzpatrick’s 1.15% target area on the US Ten-Year, you would be talking about global conditions that would literally be terrifying. Just imagine what the unemployment numbers would look like. Conditions would have to deteriorate horrendously. Think about the collapse in tax revenue. The budget deficit would blow out of control….
Click here to read the full interview on KingWorldNews.com…
Jim Sinclair’s Commentary
The Leading Formula Provides A Different Look CIGA Eric
The leading formula, calculated from tax withheld rather than total receipts, provides a slightly different perspective of economic activity in the United States. It’s tendency to turn ahead of the formula’s trend provide it with leading characteristics.
Chart: The Leading Formula: US Dollar and Federal Taxes Withheld (TW) Less Total Government Outlays (TO) As A % of GDP, 12 Month Moving Average
More…
Spain nationalizes fourth-largest bank as crisis deepens CIGA Eric
The derivative pile is massive, highly intertwined throughout the global financial system and will be protected at all cost.
Headline: Spain nationalizes fourth-largest bank as crisis deepens
MADRID – Spain’s government will effectively nationalize the nation’s fourth largest bank to shore up the hurting banking sector and try to convince investors the country doesn’t need a bailout like those taken by Greece, Ireland and Portugal, the Economy Ministry said Wednesday. Under the deal, €4.5 billion ($5.9 billion) in funding that Bankia SA received from Spain in 2010 and 2011 will be converted into shares of the institution’s parent company, the ministry said in a statement. On Friday, the government is expected to announce a more wide-ranging banking system overhaul to free up frozen credit as Spain weathers a recession and 24.4% unemployment — the worst jobless rate among the 17 nations that use the euro. Bankia faces the heaviest exposure among Spain’s banks to bad property loans caused by a construction boom that went bust, and holds €34 billion in problematic loans. The government decision to assume control of the bank came after Bankia directors approved the plan and nervous investors sent Spanish government bond yields soaring and stocks plunging. They are concerned Spain may be forced to ask for a bailout. Spain will get 45% of Bankia under the deal and "will acquire control," the ministry said.
Source: usatoday.com
More…
Dear CIGAs,
Jim Sinclair’s Commentary
JPMorgan Chase Says CIO Unit Suffered ‘Significant’ Loss
JPMorgan Chase & Co. (JPM) said it lost about $2 billion tied to synthetic credit securities after positions taken by its chief investment office were riskier than expected.
“This portfolio has proven to be riskier, more volatile and less effective as an economic hedge than the firm previously believed,” the New York-based company said today in a quarterly securities filing. JPMorgan declined 5.5 percent to $38.50 in extended trading at 4:51 p.m. in New York.
More…
The U.S. has an unsustainable and dangerous fiscal trajectory: Rubin – Freeland File
Former Treasury Secretary Robert Rubin states that the country’s deficit will lead to some form of major duress like high inflation, a long period of very slow economic growth and, most likely, a serious financial and economic crisis. (May 10, 2012)
A Civilized Rebuttal to Charlie Munger By Christopher Barker
Dear Mr. Munger,
You and I have been down this road before, sir.
Nearly two years ago, I asked you to consider retracting your surprising characterization of folks like me — those who choose to allocate a portion of their capital to gold — as "jerks."
You see, I hail from a corner of the financial universe where investors from all walks of life converge to discuss ideas and investment strategies in an environment of mutual respect and decorum. It is my firm belief that once the discussion of a controversial topic deteriorates into efforts to cast aspersions upon the character of those with an opposing view, we abruptly exit the realm of civilized debate and sacrifice any opportunity to learn from each other in constructive ways.
That is why I was deeply disappointed to see that you chose to debase the tenor of the public debate on gold last week by stating your belief that "civilized people don’t buy gold." Your full comment was rather bizarre, so I am compelled to repeat it in full: "I think gold is a great thing to sew onto your garments if you’re a Jewish family in Vienna in 1939, but civilized people don’t buy gold, they invest in productive businesses."
With all due respect, sir — and I do still believe you are due much respect following a long career of well-documented accomplishments as an investor — that statement is utterly indefensible. You are of course entitled to your opinions about gold, but I implore you to cease casting spurious judgments upon those individuals who may hold an opposing perspective. Just as before, I will kindly accept your apology for the particular phrasing employed; though this time around I’ll know better than to hold my breath.
The word "civilized" carries with it an enormous weight of semantic baggage from centuries of unfortunate applications. That is a topic for another day. But I think it’s important to note that many of the individuals opting to seek some financial shelter in gold are not the billionaires like yourself who are already set for life. In an environment where bonds and cash yield imperceptible nominal returns, and certainly for as long as government deficit-spending continues to launch into the stratosphere, gold offers a uniquely powerful alternative asset in which to park one’s hard-earned capital.
Warren Buffett’s own father, Rep. Howard Buffett, recognized the monetary role of gold in empowering the masses to protect themselves from the effects of uncontrolled spending in Washington. Back when you were a young lad, in an essay titled Human Freedom Rests on Gold Redeemable Money, Buffett explained: "Far away from Congress is the real forgotten man, the taxpayer who foots the bill. He is in a different spot from the tax-eater or the business that makes millions from spending schemes. He cannot afford to spend his time trying to oppose Federal expenditures. He has to earn his own living and carry the burden of taxes as well." At the close of the piece, Buffett concluded: "There is no more important challenge facing us than this issue — the restoration of your freedom to secure gold in exchange for the fruits of your labors."
I wonder, Mr. Munger, was Warren Buffett’s father uncivilized?
Investing in productive businesses
Even as I take exception to your repeated assaults against the character of those who have seen fit to acquire some exposure to gold, I take pleasure in locating patches of common ground between us. I remain a big fan of your 2010 parable — your cautionary tale in which a nation’s addiction to casino gambling (derivatives) leaves foreigners, "particularly foreigners with savings to invest," deliberately avoiding that nation’s currency and bonds.
At the time, I hailed your piece as "a timely attempt to instruct a nation in the basic foundations of fiscal solvency and the potential perils of our current trajectory." I consider it my duty to inform you, however, that any scenario involving a substantial decline in foreign demand for U.S. currency and bonds will necessarily invoke a major move into gold that would have wildly bullish implications for the metal’s price. So if one were to grow wary of saving capital in U.S. dollars, but risks being labeled as uncivilized for looking instead to gold, I wonder… where would you have them go?
In your recent comment, you seem to offer equities as the superior choice. I certainly agree that investing in "productive businesses" is an essential component of a sound investment strategy, but surely you can see that gold and equities need not be mutually exclusive options for investors.
A reasonable allocation to gold or silver bullion has already proven an astonishingly effective means of safeguarding hard-earned capital during this ongoing period of structural distress in major fiat currencies. When I perceived the threat of a systemic financial crisis back in 2005, I began accumulating shares of the gold and silver bullion proxy Central Fund of Canada (AMEX: CEF ) . That was one of the soundest investment decisions I’ve made! As the following chart will show, the bullion proxy has appreciated 280% over the past seven years.
Of course, I continued to invest in productive businesses simultaneously. They just happened to be dominated by resource-related companies that fit within my bullish outlook for hard assets. I established early positions in runaway success stories Silver Wheaton (NYSE: SLW ) and Eldorado Gold (NYSE: EGO ) , and held my positions confidently through the massive correction in 2008.
Of course, not all of my mining stocks have performed as well, and indeed we are presently in the midst of a very substantial correction in the sector. I know you’re a consummate value investor, so I wonder whether you have pondered the deep value built into a quality gold stock like Goldcorp (NYSE: GG ) at current levels. Accordingly, I have maintained bullish CAPScalls on each of the above-named stocks for several years running.
I assure you, Mr. Munger, I am not a "jerk." And if I don’t fit your definition of "civilized," then I’m quite sure I don’t want to. But if you must stick solely to productive businesses while insulting those who hold gold bullion, then I recommend a bit of exposure to the quality miners. They may be volatile, and the industry has shown it is certainly not exempt from risk, but as the above chart illustrates, these miners on the whole are handily outperforming your own Berkshire Hathaway (NYSE: BRK-B ) over the past several years.
Link to full article…
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The beating that Sprott Inc.’s shares have taken in recent months may have made them an attractive entry point for investors looking to play a bullish outlook for gold and silver.Eric Sprott, the firm’s founder and architect of the dominant precious metals theme, is a big believer that the price of gold and silver – as stores of value – will climb as governments debase their currency by printing money to stimulate their economies. While the metals stocks have sharply lagged their bullion peers, the firm argues that these oversold stocks are poised for a rebound.
Read More @ CTV News
Dear CIGAs,
With global investors concerned about key markets, today King World News interviewed legendary Jim Sinclair’s colleague and fellow trader, Dan Norcini. Norcini told KWN that a decisive break below the 1.8% level on the US Ten-Year Note would signal that a tsunami of deflation could engulf the globe. Norcini said this could trigger “a collapse in tax revenue” and budget deficits would “blow out of control.” Here is how Norcini described the precarious situation: “If we see the yield on the US 10-Year Note break below the 1.8% level, what it’s to signal to bond traders around the world is that we have a deflationary wave coming. I think the reason the 1.8% level has been a floor so far is because most traders are convinced the Bernanke-led Fed will not allow deflation to occur.”
Dan Norcini continues:
“If you look at the following weekly chart of the US Ten-Year Note, notice the yield has never closed, on a weekly basis, below the 1.8% level. It has penetrated that level on more than once occasion, but always recovered to close back above that level by Friday.
If we were to see a weekly close below the 1.8% level, that would definitely confirm the market would be expecting a serious bout of deflation. When the Citibank analyst, Fitzpatrick, mentioned in his KWN interview that the US Ten-Year yield could fall to as low as 1.15%, people have to understand that the conditions around the world would have to be absolutely horrific for that to occur (see chart below).
If we hit Fitzpatrick’s 1.15% target area on the US Ten-Year, you would be talking about global conditions that would literally be terrifying. Just imagine what the unemployment numbers would look like. Conditions would have to deteriorate horrendously. Think about the collapse in tax revenue. The budget deficit would blow out of control….
Click here to read the full interview on KingWorldNews.com…
Jim Sinclair’s Commentary
I thought Mr. Munger might like this newspaper from the not too distant future.
The Leading Formula Provides A Different Look CIGA Eric
The leading formula, calculated from tax withheld rather than total receipts, provides a slightly different perspective of economic activity in the United States. It’s tendency to turn ahead of the formula’s trend provide it with leading characteristics.
Chart: The Leading Formula: US Dollar and Federal Taxes Withheld (TW) Less Total Government Outlays (TO) As A % of GDP, 12 Month Moving Average
More…
Spain nationalizes fourth-largest bank as crisis deepens CIGA Eric
The derivative pile is massive, highly intertwined throughout the global financial system and will be protected at all cost.
Headline: Spain nationalizes fourth-largest bank as crisis deepens
MADRID – Spain’s government will effectively nationalize the nation’s fourth largest bank to shore up the hurting banking sector and try to convince investors the country doesn’t need a bailout like those taken by Greece, Ireland and Portugal, the Economy Ministry said Wednesday. Under the deal, €4.5 billion ($5.9 billion) in funding that Bankia SA received from Spain in 2010 and 2011 will be converted into shares of the institution’s parent company, the ministry said in a statement. On Friday, the government is expected to announce a more wide-ranging banking system overhaul to free up frozen credit as Spain weathers a recession and 24.4% unemployment — the worst jobless rate among the 17 nations that use the euro. Bankia faces the heaviest exposure among Spain’s banks to bad property loans caused by a construction boom that went bust, and holds €34 billion in problematic loans. The government decision to assume control of the bank came after Bankia directors approved the plan and nervous investors sent Spanish government bond yields soaring and stocks plunging. They are concerned Spain may be forced to ask for a bailout. Spain will get 45% of Bankia under the deal and "will acquire control," the ministry said.
Source: usatoday.com
More…
Dear CIGAs,
Confusion is the net effect of MSM and MOPE on the French/Greek
elections. However there is one point you can take home. The application
of austerity will be blamed for the upcoming recession in Western world
finance so you can be sure QE to infinity, which is debt monetization
on steroids, is coming here and there.
Be patient and stay the course.
Jim
Jim Sinclair’s Commentary
One quadrillion, one hundred and forty-four trillion dollars of OTC
derivatives are still out there. Don’t believe the 700 trillion
advertised by the BIS. They got that figure by changing the computer
model that was at the figure I and the BIS gave you before the overhaul.
Do you recall that the Lords of Derivatives, the International Swaps
and Derivatives Association, are meeting soon on the subject of interest
sensitive OTC derivatives? There has to be more than Morgan with their
assess in another OTC derivative sling.
JPMorgan Chase Says CIO Unit Suffered ‘Significant’ Loss
JPMorgan Chase & Co. (JPM) said it lost about $2 billion tied to synthetic credit securities after positions taken by its chief investment office were riskier than expected.
“This portfolio has proven to be riskier, more volatile and less effective as an economic hedge than the firm previously believed,” the New York-based company said today in a quarterly securities filing. JPMorgan declined 5.5 percent to $38.50 in extended trading at 4:51 p.m. in New York.
More…
The U.S. has an unsustainable and dangerous fiscal trajectory: Rubin – Freeland File
Former Treasury Secretary Robert Rubin states that the country’s deficit will lead to some form of major duress like high inflation, a long period of very slow economic growth and, most likely, a serious financial and economic crisis. (May 10, 2012)
A Civilized Rebuttal to Charlie Munger By Christopher Barker
Dear Mr. Munger,
You and I have been down this road before, sir.
Nearly two years ago, I asked you to consider retracting your surprising characterization of folks like me — those who choose to allocate a portion of their capital to gold — as "jerks."
You see, I hail from a corner of the financial universe where investors from all walks of life converge to discuss ideas and investment strategies in an environment of mutual respect and decorum. It is my firm belief that once the discussion of a controversial topic deteriorates into efforts to cast aspersions upon the character of those with an opposing view, we abruptly exit the realm of civilized debate and sacrifice any opportunity to learn from each other in constructive ways.
That is why I was deeply disappointed to see that you chose to debase the tenor of the public debate on gold last week by stating your belief that "civilized people don’t buy gold." Your full comment was rather bizarre, so I am compelled to repeat it in full: "I think gold is a great thing to sew onto your garments if you’re a Jewish family in Vienna in 1939, but civilized people don’t buy gold, they invest in productive businesses."
With all due respect, sir — and I do still believe you are due much respect following a long career of well-documented accomplishments as an investor — that statement is utterly indefensible. You are of course entitled to your opinions about gold, but I implore you to cease casting spurious judgments upon those individuals who may hold an opposing perspective. Just as before, I will kindly accept your apology for the particular phrasing employed; though this time around I’ll know better than to hold my breath.
The word "civilized" carries with it an enormous weight of semantic baggage from centuries of unfortunate applications. That is a topic for another day. But I think it’s important to note that many of the individuals opting to seek some financial shelter in gold are not the billionaires like yourself who are already set for life. In an environment where bonds and cash yield imperceptible nominal returns, and certainly for as long as government deficit-spending continues to launch into the stratosphere, gold offers a uniquely powerful alternative asset in which to park one’s hard-earned capital.
Warren Buffett’s own father, Rep. Howard Buffett, recognized the monetary role of gold in empowering the masses to protect themselves from the effects of uncontrolled spending in Washington. Back when you were a young lad, in an essay titled Human Freedom Rests on Gold Redeemable Money, Buffett explained: "Far away from Congress is the real forgotten man, the taxpayer who foots the bill. He is in a different spot from the tax-eater or the business that makes millions from spending schemes. He cannot afford to spend his time trying to oppose Federal expenditures. He has to earn his own living and carry the burden of taxes as well." At the close of the piece, Buffett concluded: "There is no more important challenge facing us than this issue — the restoration of your freedom to secure gold in exchange for the fruits of your labors."
I wonder, Mr. Munger, was Warren Buffett’s father uncivilized?
Investing in productive businesses
Even as I take exception to your repeated assaults against the character of those who have seen fit to acquire some exposure to gold, I take pleasure in locating patches of common ground between us. I remain a big fan of your 2010 parable — your cautionary tale in which a nation’s addiction to casino gambling (derivatives) leaves foreigners, "particularly foreigners with savings to invest," deliberately avoiding that nation’s currency and bonds.
At the time, I hailed your piece as "a timely attempt to instruct a nation in the basic foundations of fiscal solvency and the potential perils of our current trajectory." I consider it my duty to inform you, however, that any scenario involving a substantial decline in foreign demand for U.S. currency and bonds will necessarily invoke a major move into gold that would have wildly bullish implications for the metal’s price. So if one were to grow wary of saving capital in U.S. dollars, but risks being labeled as uncivilized for looking instead to gold, I wonder… where would you have them go?
In your recent comment, you seem to offer equities as the superior choice. I certainly agree that investing in "productive businesses" is an essential component of a sound investment strategy, but surely you can see that gold and equities need not be mutually exclusive options for investors.
A reasonable allocation to gold or silver bullion has already proven an astonishingly effective means of safeguarding hard-earned capital during this ongoing period of structural distress in major fiat currencies. When I perceived the threat of a systemic financial crisis back in 2005, I began accumulating shares of the gold and silver bullion proxy Central Fund of Canada (AMEX: CEF ) . That was one of the soundest investment decisions I’ve made! As the following chart will show, the bullion proxy has appreciated 280% over the past seven years.
Of course, I continued to invest in productive businesses simultaneously. They just happened to be dominated by resource-related companies that fit within my bullish outlook for hard assets. I established early positions in runaway success stories Silver Wheaton (NYSE: SLW ) and Eldorado Gold (NYSE: EGO ) , and held my positions confidently through the massive correction in 2008.
Of course, not all of my mining stocks have performed as well, and indeed we are presently in the midst of a very substantial correction in the sector. I know you’re a consummate value investor, so I wonder whether you have pondered the deep value built into a quality gold stock like Goldcorp (NYSE: GG ) at current levels. Accordingly, I have maintained bullish CAPScalls on each of the above-named stocks for several years running.
I assure you, Mr. Munger, I am not a "jerk." And if I don’t fit your definition of "civilized," then I’m quite sure I don’t want to. But if you must stick solely to productive businesses while insulting those who hold gold bullion, then I recommend a bit of exposure to the quality miners. They may be volatile, and the industry has shown it is certainly not exempt from risk, but as the above chart illustrates, these miners on the whole are handily outperforming your own Berkshire Hathaway (NYSE: BRK-B ) over the past several years.
Link to full article…
Please support our efforts to keep you informed...
Thank You
I'm PayPal Verified
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