Elliott Management: We Make This Recommendation To Our Friends: If You Own US Debt Sell It Now

Every now and then we prefer to sit back and let some of the smartest money speak, especially when said smart money agrees with us. In this case, we hand the podium over to none other than Paul Singer's Elliott Management, which after starting with $1.3 million in 1977 was at $19.8 billion most recently. No expert networks, no high frequency trading, no "information arbitrage", no crony capitalism and pseudo monopolies of scale: Singer did it all the old fashioned way: by picking undervalued assets and watching them appreciate. The timing is opportune because while Elliott has much to say about virtually everything in their latest 20 pages Q2 letter, it is the billionaire's sentiment vis-a-vis US Treasury debt that may be most critical, and may be the catalyst that resulted in today's abysmal 10 Year bond auction. To wit: "long-term government debt of the U.S., U.K., Europe and Japan probably will be the worst-performing asset class over the next ten to twenty years. We make this recommendation to our friends: if you own such debt, sell it now. You’ve had a great ride, don’t press your luck. From here it is basically all risk, with very little reward." There is little that can be misinterpreted in the bolded statement. And while many have taken the other side of the Fed over the past 3 years, few have dared to stand against Paul Singer because if there is one person whose opinion matters above most, certainly above that of the Chairsatan, it is his.

Richard Russell – Has A Massive & Historic Bubble Popped?

from KingWorldNews:

Today the Godfather of newsletter writers, Richard Russell, wrote about everything from gold, to Meredith Whitney’s death threats, to one of the greatest bubbles in history. But first, Russell asks himself this very intriguing question: “Question — Russell, everybody has emotions. So where are your emotions regarding this market? From an emotional standpoint, are you really bullish or bearish?”
“Answer — If the Averages confirm that this is truly a bear market, I’ll have mixed emotions. On the one hand I will have been proven right on my bear market call, and that will be a boost to my ego. But I can’t say that I’d be happy that we’re in a primary bear market.
But if the Averages close above their May peaks, and all my charts point to a bull market, then I’ll have been proven wrong on my bear market call, and that will be a bruise to my ego. Nevertheless, I’d much rather be living through a bull market than a bear market — a bull market would be far better for me and my kids and for my business.”
Richard Russell continues @ KingWorldNews.com

Welcome to the Military Dictatorship: ROMNEY WANTS PETRAEUS AS VP

from Drudge Report:

President Obama whispered to a top fundraiser this week that he believes GOP presidential hopeful Mitt Romney wants to name Gen. David Petraeus to the VP slot!
“The president wasn’t joking,” the insider explains to the DRUDGE REPORT.
A Petraeus drama has been quietly building behind the scenes. Romney is believed to have secretly met with the four-star general in New Hampshire.
The pick could be a shrewd Romney choice. A cross-party pull. The Obama administration hailed Petraeus as one of history’s greatest military strategists. Petraeus was unanimously confirmed as the Director of the CIA by the US Senate 94-0.
But Petraeus has categorically asserted that he has NO political ambitions. And Team Obama stands prepared to tie one of their own to “Bush wars.” A Petraeus pick could been seen as simply shuffling the decks of power in DC.
Read More @ DrudgeReport.com

Market has Now Fully Priced In Another 1 Trillion LTRO

Just over a month ago we laid out the market's key indicator for whether NEW QE (or the just as fungible LTRO / unsterilized money printing from Europe) was likely. The 5Y5Y forward inflation expectation has been invaluable in front-running decisions by the world's anti-deflation central banks. What is amazing is that the market has become so conditioned now to the glut of easy money (knowing deep down it fixes nothing but needing that fix for their 'assets') that based on this framework, it appears inflation expectations have now priced in another EUR1 trillion worth of LTRO. We strongly suspect, given the one-year highs in inflation expectations that the Fed will disappoint in September (no matter how much insanity Rosengren spouts) but Draghi will come under increasing pressure not to disappoint (like he did last time).

Neil Barofsky on the Fed and Treasury Anger over Standard Chartered

Buy More Bonds Doesn't Solve Anything

Eric De Groot at Eric De Groot - 26 minutes ago

A buying program would be more likely to stimulate if the Fed actually bought corporate rather than government bonds. The point doesn’t even enter the discussion here. Success of any buying program requires the dollar value of the stimulation to exceed that of the relentless and ongoing asset destruction worldwide. In other words, the forces of inflation must exceed that of... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

 

 

Definitive Primer On Gold/Silver Market Manipulation

Dave in Denver at The Golden Truth - 45 minutes ago

*"If I had to vote for Obama or Romney, I'd shoot myself"* - Marc Faber * * *"Beware of false knowledge; it is more dangerous than ignorance" *- George Bernard Shaw For those of you who have not seen it yet, I'm posting the interview of GATA's Treasurer, Chris Powell, with Lauren Lyster of Capital Account. For those of you who were unaware, Capital Account is hosted by RT.com, and it does some of the finest truthseeker reporting in media land. Ms. Lyster interviews Mr. Powell regarding the ongoing gold and silver manipulation, likely being conducted by a few big bullion banks l... more » 

 

 

 

Rational Decisions In Closed Systems

Trying to be “outside” of consensus is difficult, as it requires “mental capital”. You have to be able to withstand the daily barrage of tainted news, opinions and stock price movements. Going against the stream does not “feel” good and consumes more energy than simply floating with the tides. No pain, no gain. It is not easy to maintain your views given the unhelpful mainstream media (concerned about advertising dollars from financial services firms). Politicians and central bankers are nothing but bubbling fountains of propaganda (they somehow make it easier to read the truth between the lines, since they always seem to lie; for example, if the Spanish Prime Minister says “Spain has not asked the IMF for a bailout” you can safely assume that he if just off the phone with Christine Lagarde, begging the IMF for help)....Back to the stock market: even IF everyone was smart enough to buy stocks in the darkest days of a recession it wouldn’t work – every buyer needs a seller. The structure of the market – relatively constant supply of shares and relatively constant amount of money available for stock market investments (= demand) require any changes in investor preferences (cash or shares) to be resolved via the price. Humans are hard-wired to behave rationally. This makes it so hard for us to escape the “rationality-trap” of the stock market.

Used Vehicle Prices Plunge Signaling End Of Auto Party

As channel-stuffing shifted from the US (here) to China (here) and Europe (here), so the new vehicle sales data has disconnected from a number of realities. Whether it is economic growth or Ford's share price, things look a little over-cooked in the land of if-we-build-it-the-government-will-buy-'em. However, there is one index that tends to see through all the unreality much more clearly than our analysis above, that is the Used Vehicle Price index. Each time this index has dropped and broken below its two-year average, the auto industry has tended to fade rapidly. After yesterday's comments on the lowering of collateral standards for subprime auto lending, it would appear we are setting up nicely for some whocouldanode moment in the manufacturing sector's most critical industry.

Is Free-Market Capitalism Impossible?

In a genuinely free market, rich corporations people have both the resources and incentive to corrupt the government in order to make the market less free. In other words, Capitalism only works in a world in which people have integrity and are accountable to others and themselves - which is the weakest link. And so you end up with? America. In short: "there ain't no such thing as a free market" - which is not to say that we shouldn't try. The following clip points out that even seemingly pro-business legislation is not beneficial to society or businesses themselves broadly with the analogy that "what's good for GM may not be good for America after all"; which begs the question: do humans doom capitalism by default?

Big Oil’s Unwitting Bid for Kurdish Statehood

by Marin Katusa, Casey Research:

The connections between oil, money, and power are very well established. These three factors can elevate individuals to office, give Big Oil companies major sway with national governments, lead countries into war with one another, and influence or control any number of major relationships and conflicts.
But can oil bequeath statehood? It’s a chicken-versus-egg question. Sovereign nations control the resource wealth in their lands, but what about the reverse: if a government controls the resource wealth in its region, is it in fact at the helm of a sovereign state?
It may seem a confusing question, but in the autonomous region of northern Iraq called Kurdistan it’s a question that deserves some thought. Kurdistan has been a country within a country for years, both part of Iraq and separate from it. The Kurdistan Regional Government (KRG) governs the region, supported by its own armed forces, but the KRG still relies on the central Iraqi government in Baghdad for its budget. It’s a reliance of necessity, based on the fact that Baghdad has aggressively retained control over all Iraqi oil revenues, depriving Kurdistan of the oil revenues that would otherwise fill its coffers. And it’s a reliance from which Kurds cannot wait to escape.
Read More @ CaseyResearch.com

America 2012: Oh Say Can You Eat

by Charles Hugh Smith, Of Two Minds:

A fast-food ad slogan perfectly encapsulates America’s devolution.
A new fast-food marketing slogan, “Oh say can you eat,” a play on the national anthem’s opening line, perfectly captures the pervasive devolution of America’s value system. This advert slogan was undoubtedly designed to be amusing or “cute” in playing off the national anthem, but the campaign’s real message is that patriotism is now identified with gorging oneself on junk food.
Our national identity has merged with the consumption of junk food and the wholesale gratification of similar addictions that provide little pleasure beyond satiation, all served up by a marketing complex devoted to stimulating wants based on alienation from body, soul and ultimately from reality itself.
We live in an America that has been persuaded to worship convenience and gratification as the primary drivers of life. Gratification of natural hungers (for food, sex, primacy, etc.) have been transformed by marketing into product lines measured by convenience: real food is bothersome and inconvenient, fast food is gloriously convenient.
One step down the reification ladder leads to the implicit message that anything inconvenient is “bad” and should be replaced by something that is tasty and convenient–including civics, jobs, health and of course eating. Getting a job should be convenient, as in “I have a college degree, now give me a good-paying job.” Finding a market need and filling it with a good or service that is faster, better and cheaper is terribly inconvenient, and so having a job delivered like a fast food meal (i.e. with a minimum of delay and effort) has become a “right” that the Savior State should fill.
Read More @ OfTwoMinds.com

Welcome to the Third World, Part 6: Portraits of a Quiet Depression

by John Rubino, DollarCollapse.com:
Last month I took a long, winding West Coast trip, partially for work and partially to see some old friends. It was…shocking. Almost without exception the old friends are having money or career troubles, in some cases catastrophically so. Most, to one degree or another, have lost the lifestyles they once saw as every well-educated American’s birthright.
These are people who expected to live the life of the 10%, if not the 1%, right through to an easy, low-stress retirement. That most didn’t make it is both scary and instructive for reasons I’ll get to in a minute. But first, some stories, with names and details changed for privacy, but otherwise true:
* Rebecca was an investment analyst right out of school, and a natural. We worked together in our late 20s and there was no doubt which of us was headed for bigger things. After a few years of promotions and big raises she took a new, more challenging job for way more money, rode it for a while in the 1990s, and then ran into one of the conflicts typical of finance and got fired — and never recovered. Today she’s divorced and working multiple crappy jobs while going on a never-ending series of interviews, trying desperately to get back the life that seemed like such a sure thing 15 years ago.
Read More @ DollarCollapse.com

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Ron Paul Plays ‘Hardball’ With Romney Over Fed Audit

by Jeff Nielson, SilverGoldBull:
Here is a very interesting news item, and (certainly for American viewers) something which many would consider long overdue. Ron Paul is flexing his political muscles. For the first time that I can recall, he is seeking to use some of the “political capital” he has accumulated as the most-popular grassroots politician in the U.S., during his two media-censored campaigns for the Republican presidential nomination.
Here is what Dr. Paul had to say to the media, Mitt Romney, and the Republican Establishment on the subject of his push to “audit the Fed”:

…“It’s good economics and it’s good legislation, but it’s also good politics, because 80 percent of the American people agree with it…exclude it, [and] I would think some of my supporters would be annoyed and feel strongly enough to take it to the floor under the rules.” [emphasis mine]

Translation: if Romney dares to turn his back on a piece of legislation supported by 80% of all Americans (and likely an even higher percentage of Republicans); he risks sparking a messy revolt within his own party – less than 3 months before Election Day.
Read More @ SilverGoldBull

Knight Capital: Just a Warm-Up for the Big One?

by Rick Ackerman, Rick Ackerman.com:

Anyone betting that the global financial system will continue to muddle along indefinitely deserves to reap the whirlwind that’s coming.  As the rest of us well know, the international banking system is being kept afloat solely by political lies, stupidity, corruption, greed and, most of all, egregiously misplaced confidence. It would seem to be only a matter of time before the rotted timbers of this belief system give way.  But what will be the catalyst?  The possibility or even likelihood that the financial system will be toppled by some event no one was expecting was an implicit theme of Nassim Taleb’s widely read 2004 book, Fooled by Randomness.  In the New York Times, Taleb asserted the following:  What we call here a Black Swan (and capitalize it) is an event with the following three attributes. First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.
Read More @ RickAckerman.com

Federal Court Upholds the Herding of Demonstrators Into “Free Speech Zones”

by Mac Slavo, SHTFPlan:

There was once a group of men who established a fundamental law of the land that allowed the people of their new found country to peaceably assemble and petition their government for a redress of grievances. These founding fathers of that Great nation even went so far as to declare that the government itself could never make a law that would threaten to supplant these protections, which were reserved exclusively for the people. This concept of freedom of assembly and protest was so critical to protecting and preserving the liberty of the people that it was the very first law – the very first Amendment – proposed by the newly elected representatives of These United States of America and came into effect on December 15, 1791.
It’s frightening what just a couple of hundred years of politicking, self serving greed and expediency can do to a nation. Apparently, somewhere along the way, politicians and judges who hold their personal views in higher regard than those laws upon which this nation was founded, have taken it upon themselves to decide what’s best for the American people and that, perhaps, we have a little too much liberty:

A federal appeals court has upheld the creation of no demonstration zones, which prohibit free speech in certain public areas.
The Second Circuit Court of Appeals released a ruling yesterday upholding a lower court’s decision that also declared such zones as being permissible. The opinion was penned by Judge Dennis Jacobs on behalf of a three judge panel that included Judges Pierre Leval and Debra Ann Livingston, two of whom are Republican judges appointed by George H.W. Bush.

Read More @ SHTFPlan.com

Notes on Direct Registration and Share Certificates

August 8, 2012, at 11:04 am
by Jim Sinclair

My Dear Extended Family,

More misinformation from brokers which stems from either simple stupidity, their internal methods, or an attempt to dissuade you from taking your shares off the broker’s balance sheet. All street name stock keeps you in their system so you will sell through them.

I am amazed.

Your broker speaks and you immediately assume I am wrong in what I am telling you. Your broker is wrong in what they are telling you for any of the four above reasons.

You have to fight the system to be free of it. All cowards, dullards and sloths will end up broke in this multi- year experience we are in.

You want to be comfortable and non-confrontational like most CEOs in PM shares? Sit back and relax. I choose to fight with every asset I have.

Regards,
Jim

Jim,
Fidelity currently charges zero for transfers to transfer agents; ditto for UBS. Fidelity charges $100 for certificates; in recent months UBS less than $100 (though of course they have other fees).
I also learned something you yourself might not be so familiar with when selling something in DRS. I wanted to sell something held by Computershare USA, but I wanted to time the sale, so I wanted a brokerage to sell, not Computershare. I went to Fidelity:
1. To get shares to the brokerage from a transfer agent one has to fill out a brokerage’s form which they submit to the transfer agent (you probably knew this a long time ago).
2. The transfer agents vary greatly in the time it takes them to deliver the shares (perhaps you did not know). The rather junior person told me that, according to his informal experience, the time could easily take up to two weeks (the max). Computershare is the best, usually delivering in about 4 days. I asked whether the median might be about 7-10 days, and he said he guessed that was right.
CIGA Jerome

Jerome,

1. This is usually not so if you already have an account you kept open with $0.

2. The transfer out of direct registration to the broker is a computer entry that takes no longer than hitting your enter key. If you need an immediate sale the Transfer Agent can arrange that for you.

Jim

Jim,
I have some of my shares of TRX in direct registration and they reside in my safe deposit box. Can they be someplace else like with a brokerage firm?
The Bank of XYZ has my IRA and I believe after talking with their lawyer from Kansas or wherever that I am pretty safe there. Has something changed in the last 5 or 6 years? Some custodian must hold the IRA, right?
Thanks for all you do for us little fishes (CIGAs),
CIGA Jack

Jack,

Shares in direct registration are evidenced by a statement from the transfer agent sent directly to you. Those companies that still issue certificates do so via the transfer agency, therefore informing the transfer agent where your DR shares are of your desire for certificate results in delivery to you of a certificate. What do you have in your safety deposit box? A statement from the transfer agent of DRS of certificates in your name?

Your question is "does the bank actually hold your IRA or do they hold your IRA via their broker and clearing arrangement in their name as custodian for you." You can be sure the answer is the latter because for a bank to fear a broker’s solvency would be quite unusual.

Jim

Goodday Jim,

As an investor and fund manager(small for private clients) from Europe I have read your site for many years and would like to say it has given me a lot of insight and guidance through the financial markets. Also I started a financial blog some 4 months ago to inform interested people in the workings of financial/political markets and how to protect oneself. I have recommended and applied stocks in different currencies, at least 2O % gold/silver related (including your Tanzanian Royalty Gold, and safe dividend paying stocks). The net returns for investors are above 25% because of sincere stock picking. Many thanks to you and your excellent work!!
Now to the issue of direct registration. I use a smallish Dutch broker for my stock transactions. On my request they informed me that my US and Canadian shares are held by Pershing Corp, a sub of BNY Mellon. The shares are held with Pershing in the name of my Dutch broker Binckbank NV. Binck informed me that individual registration is not possible because I am not a client of Pershing, but Binck is. Concluded with "best regards" and "hope this is helpful to you". Not very much so. What to do?
Best (sincere) regards,
CIGA Joseph

Dear Joseph,

Pershing is the clearing agent for your bank. Assuming the companies you have invested in participate in DRS, it is the owner of the shares that can obtain direct registration in their name at the transfer agent for the company.

The answer you have gotten is standard operating practice to get rid of you and your request. It can be done but neither your bank nor the clearing agent have any motivation to help you. You can go to the transfer agent of the company and request their assistance in getting DRS done.

In DRS the transfer agent is your friend while your bank and the clearing agent is your challenge. In direct registration neither your bank nor your clearing agent has any financial relationship with the individual owner or entity owner.

Regards,
Jim

 

In The News Today

August 8, 2012, at 10:48 am
by Jim Sinclair

Jim Sinclair’s Commentary

If 20% of the product somehow finds its way out of China, there is a simple solution. Stop mining 20% and apply harsh punishments to the black market banksters.

China cuts mines vital to tech industry By Kevin Voigt, CNN
updated 7:30 AM EDT, Wed August 8, 2012
Hong Kong (CNN) — China will cut production of rare earths — minerals vital for technology makers worldwide — by 20%, a move that threatens to inflame trade tensions between Beijing and Washington.
Rare earths are 17 minerals with magnetic and conductive properties that are used in most of today’s electronic devices, including flat-screen televisions, smart phones, hybrid cars and weapons. Nearly all of the world’s supply of rare earths comes from China.
China changed production rules, which will close down one-third of the nation’s 23 mines and about half of 99 smelting companies, Jia Yinsong, director of the ministry’s rare earths office, told China Daily Wednesday.
China implemented the rules to improve environmental conditions and help consolidate the industry, officials said. The new regulations boost the minimum annual output at mines to 20,000 metric tons and 2,000 tons per year for smelting operation — a move which will weed out smaller operations.
More…



Jim Sinclair’s Commentary

I do not believe that Rosenberg is a voting member so you can be sure another non-voting member will take the other side.

The answer is QE is the only tool that creates discretionary funds in amounts that can go to infinity in the care of the Fed and the Treasury.

If the economic downward spiral we are on the verge of is larger than anticipated by the establishment, QE is the only tool that works.

Fed’s Rosengren makes case for sizable QE3
Focus on mortgage-backed securities, Fisher calls it a mistake By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — The U.S. economy is “only treading water,” and the U.S. central bank needs to launch a sizable and open-ended asset-purchase program to spur demand, a Federal Reserve official said Tuesday.
“The GDP reports have been disappointing, [and] my expectation is the second half of the year won’t be much better,” Boston Fed President Eric Rosengren said in a sit-down interview with CNBC that followed an interview Monday with the Wall Street Journal.
Boston Fed President Eric Rosengren speaks during the Sasin Bangkok Forum July 9, 2012.
“If you are treading water, even if you are a good swimmer, at some point you need to get to land,” Rosengren said.
Rosengren, who is not a voting member of the Federal Open Market Committee this year, had said he was open to more easing earlier this summer. Read about Rosengren and others on the Fed who were moving closer to QE3 last month.
But his call for “a much more accommodative policy” shows that his worries about the recovery have grown.
More…

 

Jim’s Mailbox

August 8, 2012, at 10:48 am
by Jim Sinclair

History Repeats But Today’s Cheers Will Eventually Turn into Tomorrow’s Tears CIGA Eric
We’ve seen this game played throughout history and the end result is always the same.

1. Countries, States, or Cities Impose High Taxes on everyone considered "rich".
2. As a result, the rich flee and population declines
3. Countries, States, or Cities redefine who’s rich to collect more taxes.
4. Aggressive taxation or enforcement curtails investment, economic growth, employment, and opportunity for the existing population
5. Go to 2, If only poor remain go to 7
6. Default, like many American cities today, was only a matter of time as the interest burden slowly overwhelmed diminishing tax receipts.
7. Creditors rule the day, and in the extreme case of the city of Mainz, Germany, it was looted and burnt to the ground.

Headline:  Indigestion for ‘les Riches’ in a Plan for Higher Taxes
The call to Vincent Grandil’s Paris law firm began like many others that have rolled in recently. On the line was the well-paid chief executive of one of France’s most profitable companies, and he was feeling nervous.
President François Hollande is vowing to impose a 75 percent tax on the portion of anyone’s income above a million euros ($1.24 million) a year. “Should I be preparing to leave the country?” the executive asked Mr. Grandil.
The lawyer’s counsel: Wait and see. For now, at least.
"We’re getting a lot of calls from high earners who are asking whether they should get out of France,” said Mr. Grandil, a partner at Altexis, which specializes in tax matters for corporations and the wealthy. “Even young, dynamic people pulling in 200,000 euros are wondering whether to remain in a country where making money is not considered a good thing.”
Source:  nytimes.com
More…

 

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