Retail Exodus From Stocks Continues: Another $3.6 Billion Pulled Out Last week

There was a time when retail stock outflows were considered a bullish catalyst: after all, retail was always considered the dumb money (not "two and twenty" hedge funds which continue to underperform the stock market, and have done so for the past five years), and would pull money at the bottom and add money at the top. This is no longer the case for the simple reason that while persistent outflows from domestic equity funds continue (and as the recent shuttering of levered ETFs by Direxion shows the infatuation with synthetic mutual fund replacements is now over), for the inverse to be true there have to be inflows, which are now non-existent. In the past two years, or 106 weeks of market data, there here been 17 weeks of inflows, or 16% of the total, amounting to $31 billion. The remainder? Outflows for a total of $300 billion. In the 32 weeks of YTD 2012 money flows, there have been 5 weeks of inflows for a total of $3.6 billion (which was also equal to the outflow in the last week alone) none of which coincided with market tops, and in fact the biggest outflows occurred just as the market hit interim highs. The most recent inflow, as tiny as it may have been, curious occurred during the May lows, proving retail is if anything, the smart money now. In other words, those looking for hints about the market based on retail flows are advised to look elsewhere. What this data does show is that no matter what happens in the stock market, the outflows will persist and are unlikely to reverse direction. Because if the S&P at fresh 2012 (and multi-year) highs is unable to draw retail out of hibernation, nothing will. Where is the money flowing? Why into fixed income of course, proving that as far as the now extinct investor class is concerned, return of capital is the only thing that matters, while HFTs and prop trading desks can fight over all the return on capital scraps provided courtesy of the Chairman. Curious where the volume has gone? Now you know.

Behold The Fed's Takeover Of The Bond Market

The must see time lapse video below courtesy of Stone McCarthy shows the distribution across the entire curve of the US marketable debt, as it was held by either the Fed, or the private sector over the past three unconventional monetary policy programs: starting in 2003 and concluding yesterday. In one short minute, this clip demonstrates very vividly how the Fed effectively took over the US bond market. 

Will The Bernank Bail Out An Incompetent Congress Once More

The vital question of the moment is whether of not The Bernank will signal an intention of moving towards QE3 in his much-anticipated 'Jackson Hole' conference in two weeks. Citi's Tom Fitzpatrick believes "it would be irresponsible to do so and that we need a more 'responsible fiscal policy' which will not materialize as long as we have an 'irresponsible monetary policy' bailing policymakers out". However, what we think in this regard is totally irrelevant to this discussion for it is what we think the Fed thinks that is critical. Recent data seems to have been a little more supportive of the economy (on the face of it) and may lead the Fed to stay on hold in the near term (September meeting). This will almost certainly raise the bar extremely high for further easing as we head into the Presidential race proper. If this window closes then a move before December will be extremely unlikely barring a major financial/market/economic shock, since after the 9/13 meeting, there are no more meetings until 12/12. However this increases the danger of the Fed getting 'caught behind the curve' which must be balanced with the 'mistake' of one-monetary-step-too-far with very real inflationary consequences.

Deleveraging Needed In Next 4 Years: $28 Trillion

Over the past several years, there has been much speculation and numerous reports that America is deleveraging. It isn't. In fact, consolidated across the 5 different kinds of American debt, which takes into account not only federal, but also financial, municipal, household and non-financial, total debt as a percentage of GDP has not budged over the past 4 years and is flat at 350% of GDP. Which simply means that all of the household debt that has supposedly vaporized (at least until the next major Flow of Funds revision), all of which has taken place purely from discharges on uncollectable mortgage and credit card debt, has been replaced by federal debt, while financial debt has merely soared to take the place of the collapsing shadow debt which is imploding as the confidence in a Fed-free financial system erodes to zero. Which of course, is the worst possible outcome: instead of funding private, individual entrepreneurs, who are the true basis for America's historic growth, prosperity and success (and who, unlike the government can and will fail if they dont allocated capital efficiently) the transferred debt (from household to federal) merely goes to fund the unproductive components of the US economy: the US government which by definition produces nothing, and the financial sector, whose only product is financial innovation which serves to make the TBTFs TBTFer, and pay record bonus after record bonus, and... that's it.

So Far In 2012: Nasdaq +22%; Dow Trans +3%; Gold +3%; 10Y -3bps

QE-on or QE-off; Growth or No-Growth; Cleanest 'Dirty' Shirt or Un-Decoupling; none of that matters. There are divergences everywhere - intraday and long-term - but none of that matters. What matters is hope, faith, and a little Central Bank charity. That is, of course, until someone drops the bowl of global Kool-Aid (Merkel 'nein'; Bernanke 'no'; Xiaochaun 'bu') or markets believe they want Romney/Ryan. With the equity markets in general making new 2012 highs today (as we noted earlier), on a day with better-than-recent volumes and heavy average trade-size at the highs, we can do nothing but stand back and admire the year-to-date performance of bonds, stocks, commodities, and verbal diarrhea.

Assange Or Corzine?

The issue at hand is the sense that we have entered a phase of exponential criminality and corruption. A slavering crook like Corzine who stole $200 million of clients’ funds can walk free. Meanwhile, a man who exposed evidence of serious war crimes is for that act so keenly wanted by US authorities that Britain has threatened to throw hundreds of years of diplomatic protocol and treaties into the trash and raid the embassy of another sovereign state to deliver him to a power that seems intent not only to criminalise him, but perhaps even to summarily execute him. The Obama administration, of course, has made a habit of summary extrajudicial executions of those that it suspects of terrorism, and the detention and prosecution of whistleblowers. And the ooze of large-scale financial corruption, rate-rigging, theft and fraud goes on unpunished.

What Should Jon Corzine's Hedge Fund Be Named?

Since over the past five years hedge funds are better known for coming up with ingenious names, than for actually outperforming the market (recall that "the aggregate hedge fund index is now significantly underperforming the S&P 500 (from both the top in 2007 and the lows in 2009"), we hereby wish to do the Honorable Jon Corzine a favor, and save him the money he would otherwise spend on an expensive naming consultant, by offering up the creative services of our audience in conjuring the name for his future hedge fund. So dear ZH readers, take it away, although keep in mind Long-Term Capital Vaporization LP appears to already have been taken by a patent troll (soon to be likely sued by YHOO).

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HUI Chart

Trader Dan at Trader Dan's Market Views - 2 hours ago

The Mining Sector shares have shown some strong performance over the past three weeks having solidly rebounced from down near 390 moving up through several overhead resistance levels. A push through overhead resistance near 440 sets up a run towards a major resistance level centered near 460, which is the point that needs to be bested for a trending move to the upside to develop. 

 

 

 

Risk is off trading today/Gold and silver rise/Poor Philly Index/Poor Housing starts/

Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 4 hours ago

Good evening Ladies and Gentlemen: Gold closed up by $12.40 to $1616.10.  Silver finished the session up 40 cents to $22.21.  It seems that the physical markets in gold and silver are overpowering the paper markets.  The bankers will have to regroup and try again. The bad news today came from higher initial claims in the jobless report.  We also saw a negative reading for the 5th consecutive

 

 

 

A Crisis, Semi-Crisis, Or Both

Admin at Jim Rogers Blog - 5 hours ago

The United States is the largest debtor nation in the history of the world. Our debts are skyrocketing every year and nobody’s doing anything about it. Every country in history that’s gotten into this situation has had a crisis or a semi-crisis, or both. - *in The Fiscal Times* Related: SPDR S&P 500 Index ETF (SPY), iShares Barclays 20+ Yr Treasury Bond (ETF) (NYSE:TLT), ProShares UltraShort 20+ Year Trea (ETF) (NYSE:TBT) *Jim Rogers is an author, financial commentator and successful international investor. He has been frequently featured in Time, The New York Times, Barron’s, Forbe... more » 

 

 

 

 

BTFD... 

Silver Quietly Sneaking Higher

Trader Dan at Trader Dan's Market Views - 5 hours ago

Silver has managed to rally right to the top of its consolidation pattern without any fanfare and I should add, the participation of a great deal of managed money flows. In other words, without the benefit of the momentum crowd. CAll it a type of stealth rally. I find this very interesting as it is occuring against the backdrop of rising Treasury yields and a rising equity market. Clearly, for whatever the reason, something seems to be occurring on this inflation front that is moving below the radar screen of many investors. Could silver be sniffing out the first whiff of an inflati... more » 

 

 

 

Gold Daily and Silver Weekly Charts - Ben Bernanke, With A Printing Press, On the Comex

SP 500 and NDX Futures Daily Charts - Cue Ethel Merman

General Motors Is Headed For Bankruptcy -- Again

Eric De Groot at Eric De Groot - 6 hours ago

How many taxpayers funded businesses must fail before the public realizes something is wrong? Bankruptcy and public funds cannot restore competitiveness, innovation, and creativity needed for international success. These qualities exhibited by the likes of Willem Usselincx (Dutch West India Company), Bill Gates, Henry Ford, Steve Jobs, and Thomas Edison arise from the desire... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

 

 

 

Uncle Tom's Justice Department

Dave in Denver at The Golden Truth - 9 hours ago

Take heed Obama supporters (of course, it was no different under Bush II and would be no different under Romney), but your beloved Hope and Change President is overseeing the greatest wave of fraud, corruption and wealth confiscation in the history our country. Anyone who really cares to understand the extent to which Obama's Justice Department is enabling the process of systemic corruption and collapse should read this scathing article by Matt Taibi: LINK Anyone who still defends Obama must read that - otherwise you have no business even voting. Lew Rockwell wrote a brief editori... more » 

 

 

 

Late-1970s Deja-Vu; Did The Market 'Jump The Shark'?

Just when you thought it was safe to get back in the water of shark-infested algos; just as we hit multi-year equity index highs (with the entire interest rate complex devastatingly divergent still - despite very-recent weakness), we thought it might be at least a little instructive to remember what happened in the late 1970s as analog. These 3 simple charts of Consumer Confidence, Capacity Utilization, and Initial Jobless Claims show just what can happen when you think it's all over. While there are many 'goal-seeked' analogs, we find these extremely timely given the somewhat similar underlying conditions that the world faces; to wit, Citi notes: "A Middle East 'tinderbox' that is very susceptible to a food price shock and a likely cause of an Oil price shock (as we saw in 1973-1974 and again in 1978-1979)." 

 

 

S&P 500 Futures Above 2012 Closing High

All those who were patiently waiting for the S&P futures to close at new 2012 highs as the catalyst for Bernanke to announce QE3, can now exhale (if we end here): with S&P 500 2012 year-end earnings estimates the lowest they have been all year; with corporate revenues now negative quarter-over-quarter; and with US economic output sliding and GDP back under 2%; coupled with another step backward in housing; it was only logical that the S&P would close at fresh 2012 highs. And now, it is time for the NEW QE, LTRO 3 and more RRR and Interest Rate cuts from China and all shall be well.

Margin Hiker-In-Chief Awakes: White House "Dusting Off" Plans For Strategic Petroleum Reserve Release

It must be election season because moment ago Reuters just reported that the White House is "dusting off old plans on a potential SPR release as prices rise" according to a source with knowledge of the situation. This too, just like the earlier Corzine news, should not be a surprise. Obama made it expressly clear that with the election fast approaching, he would either force the CME to hike margins, which is also coming, or would proceed with the far dumber step of an SPR release, just so China can full up its own strategic release faster and at a lower cost. The spun version, of course, has to do with Iran, and the fear of "undermining" Iran sanction success. The same sanctions which the US granted key Iran client China a compliance waiver...

The West Has Just Become A Giant Banana Republic

Legal precedent means nothing. Rule of law means nothing. Free speech means nothing. Their own treaties mean nothing. It’s unbelievable. Anyone in the west who honestly thinks he’s still living in a free society is either a fool or completely out of touch. If that seems too radical an idea, consider that ECUADOR is now the only nation which stands to defend freedom and human rights against an assault from the United States, the United Kingdom, and their spineless allies. The west has just become a giant banana republic. Have you hit your breaking point yet? If not now… when?

Housing Recovery Lessons From Japan (In One Chart)

When real estate prices made a vertiginous ascent in the 1980s Japan the bullish refrain was that there wasn’t enough land. However, Japanese real estate prices, and even those of crowded Tokyo, have glided downwards over the subsequent two decades, accompanied by rents - interrupted by the Karate-Kid-esque 'recovery-on; recovery-off' hope that we have also started to witness in the US. Very low economic growth and a demographic headwind, despite reasonably high employment, have led to a depressed real estate market. Is this a harbinger for the West? And what defines recovery - price, volume, net equity?

Financialization's Self-Destruct Sequence

Like all systems that follow an S-curve of growth and decay, financialization cannot return to its growth phase. But there is another dynamic at play: a self-destruct sequence triggered by central bank and Central State efforts to reflate asset and credit/leverage bubbles. All central bank and State policies aimed at driving capital into risk assets boil down to reflating phantom assets purchased with debt by issuing more debt that is based on newly issued phantom assets. Phantom assets purchased with debt cannot be reflated by issuing more debt that is based on newly issued phantom assets. Piling more debt/leverage on a sandpile of phantom assets (CDS, bonds that cannot possibly be paid back, empty condos in the middle of nowhere, etc.) only heightens the probability that the unstable pile will collapse. The implicit Central Planning campaign to trigger "mild" inflation is part of the self-destruct sequence. Central planners metaphorically fight the last war, or at best the last two wars, and so they remain blind to any dynamics that did not exist in their case studies.

In The News Today

August 16, 2012, at 2:38 pm
by Jim Sinclair

China Is Looking Into Taking Over One Of Africa’s Biggest Gold Miners  by Matthew Boesler on Aug 16, 2012
Barrick Gold, the world’s biggest gold producer, announced today that they are in talks to sell the 74 percent stake in its African mining business to China National Gold Group Corporation, a state-owned enterprise in China, via a statement on its website.
The deal is a great example of China’s desire to push further into Africa to invest in commodities in order to support its rapidly expanding economy.
The World Gold Council published a big update on global gold demand trends today saying that in the second quarter, "Indian and China continued to dominate global consumer demand, accounting for a combined 45% of total second quarter jewellery, and bar and coin demand."
The African company – African Barrick Gold – was taken public by parent company Barrick Gold in 2010 and trades on the London FTSE stock exchange, but Barrick Gold still owns a huge 73.9 stake in the stock of the Africa business.
African Barrick Gold responded to the announcement with a statement of its own, saying that"Should China Gold acquire more than 30% of the voting interest in ABG, it would then be required to make an offer for the whole of ABG’s issued ordinary share capital."
If the deal goes through, African Barrick Gold – located in Tanzania – would be a major addition to China’s African mining portfolio.
More… 







Jim Sinclair’s Commentary
Here is the latest from John Williams’ www.ShadowStats.com.
- Housing Starts Activity Continued in Stagnation
- Broad Economy Is Not Recovering
"No. 465: July Housing Starts, Economic Review"
Web-page: http://www.shadowstats.com




Jim Sinclair’s Commentary

If you want to sell via the transfer agent some agents can arrange that for DRS shares.

Here is an example of Computershares arrangement:
You have two sales options when selling shares for this company:
Batch orders are submitted on each market day and will be grouped with other sale requests to be sold. The price will be the average sale price obtained by Computershare’s broker, net of fees, for each batch order and will be sold generally within 48 hours of your request during regular open market hours. Some companies enter batch sales every day, generally the batch sale will be included if the sale is received before 1 PM EST. Batch sales requests received after 1 PM EST will generally sell the following business day. This type of sale bears a handling fee of $11.00 and a transaction fee of $0.08 per share.
A Market Order sale means during market hours, your order will go to the market and sell at the next available trade. There is an additional fee for market order sales. The price will be the market price of the sale received by Computershare’s broker, net of fees. Market Order sales will sell at the next available trade. The shares are sold real time when they hit the market, however an available trade must be presented to complete this transaction. All price estimates are delayed by up to 20 minutes; therefore the actual sale price will still fluctuate. This type of sale bears a handling fee of $21.00 and a transaction fee of $0.08 per share. Market Order Sales are available for telephone and internet requests only.





Jim Sinclair’s Commentary

Yes, but Iceland’s population is miniscule in comparison.

What few recognize is that the entire Western World Financial system was broke in 2008-2009.

It is not that much better now, but well hidden from the sheeple. If the can was not kicked in March 2009 then the disaster we would all be living in now would have been catastrophic.

I do not agree the right thing was done at all, but my job is to be practical in my reporting to you. If Ben Bernanke had not acted as he did we would all be back in the Dark Ages right now.

Yes nothing was accomplished in the long run because no economic recovery took place to heal the broken balance sheet.

You can be sure Ben Bernanke will act again when the pressure is on Wall Street. He did not act in 2008-2009 because pressure was on Main Street. He acted because the OTC derivative fraud exploded and all the great names in international finance were stone cold, dead broke. So it will be again. That is the real story, and the only story that matters.

Iceland Was Right, We Were Wrong: The IMF Jeff Nielson
For approximately three years; our governments, the banking cabal, and the Corporate Media have assured us that they knew the appropriate approach for fixing the economies that they had previously crippled with their own mismanagement. We were told that the key was to stomp on the Little People with “austerity” in order to continue making full interest payments to the Bond Parasites – at any/all costs.
Following three years of this continuous, uninterrupted failure; Greece has already defaulted on 75% of its debts, and its economy is totally destroyed. The UK, Spain, and Italy are all plummeting downward in suicide-spirals, where the more austerity these sadistic governments inflict upon their own people the worse their debt/deficit problems get. Ireland and Portugal are nearly in the same position.
Now in what may be the greatest economic “mea culpa” in history, we have the media admitting that this government/banking/propaganda-machine Troika has been wrong all along. They have been forced to acknowledge that Iceland’s approach to economic triage was the correct approach right from the beginning.
What was Iceland’s approach? To do the exact opposite of everything the bankers running our own economies told us to do. The bankers (naturally) told us that we needed to bail-out the criminal Big Banks – at taxpayer expense (they were Too Big To Fail). Iceland gave the banksters nothing.
More…




Jim Sinclair’s Commentary

CIGA Green Hornet calls our attention to Illinois spending more on teachers pensions by 2016 than on education. The Green hornet is a trustworthy source

Jim Sinclair’s Commentary

A society that forgets its obligation to its elders is not a society.

It Has Come to This — Close-to-Death Cash-Strapped Americans Selling Their Life Insurance Policies
We have such an eroded public safety net that folks are reduced to selling their life insurance policies for the sake of paying their medical bill August 14, 2012
When we think of “innovative financial products,” we probably think of credit-default swaps, collateralized debt obligations, and other ghoulish abstractions that we nervously half-remember from that last Michael Lewis book we read. We probably don’t think of life insurance. But a fascinating  new article in the  New York Times Magazine  gives a very informative tour through the “life-settlements business:” an emerging marketplace whereby people who need cash near what is ostensibly the end of their life sell their life insurance policies to a third party for a price.
Here’s how it works: once a person decides to sell his/her life insurance policy, the third-party investor does a bunch of research, usually based on the the seller’s medical records, to see how long the person is likely to live. (This is important, as the third party investor is on the hook to pay the sick/dying person’s life insurance premiums until their death.) Then the seller and the investor agree on a price. Say we’re talking about a $500,000 life insurance policy, and a person with a two-year life expectancy; the investor might offer $300,000, in hopes that the difference will both cover the cost of paying premiums for the rest of the seller’s life and leave room for profit.
As ghoulish as this sounds, the article’s writer, James Vlahos, makes the case that this is in fact a pro-consumer innovation in the life insurance marketplace. He may be right; I’m not sure. But what many commenters to the article really find ghoulish is the simple fact that we have such an eroded public safety net that folks are reduced to selling their life insurance policies for the sake of paying their medical bills and the other costs associated with old age. In an era of small social security payments, high medical costs, and a failed system of retirement savings, our once-proud system to prevent poverty in old age is reeling.
More…




Jim Sinclair’s Commentary

Why do you need to be involved in things like this?

You do not. I have given you information that with a little effort can keep you out of the spread of this which is certain to come.

Sentinel ruling may hurt MF Global clients By Tom Polansek and Ann Saphir
CHICAGO | Thu Aug 9, 2012 8:18pm EDT
(Reuters) – A ruling in the case of failed futures brokerage Sentinel Management Group could make it more difficult for customers to recoup money lost in the much larger collapse of MF Global, according to Sentinel’s bankruptcy trustee.
A federal appeals court on Thursday upheld a ruling that puts Bank of New York Mellon ahead of former customers of Sentinel in the line of those seeking the return of money lost in the 2007 failure of the suburban Chicago-based futures broker.
The appeals court affirmed an earlier district court ruling that the bank had a "secured position" on a $312 million loan it gave to Sentinel, which turned out to have been secured by customer money.
Futures brokers are required to keep customers’ funds in dedicated accounts to protect them from being used for anything other than client business.
However, Thursday’s ruling suggests that brokerages can use customer funds to pay off other creditors, Sentinel trustee Fred Grede told Reuters.
"I don’t think that’s what the Commodity Futures Trading Commission had in mind" with its requirement that brokers keep customer money separate from their own, he said.
More…




Jim Sinclair’s Commentary

Holy cow!

Gunmen Have Attacked And Entered A Pakistani Air Force Base Thought To House Nuclear Weapons Adam Taylor | Aug. 15, 2012, 7:47 PM
Gunmen have attacked and entered a Pakistan air force base, according to Reuters.
The target is the Minhas Air Base in the town of Kamra, located around 40 miles outside Islamabad. The attacked is believed to be conducted by the Tehreek-i-Taliban Pakistan (TTP) — reports in the Pakistan press have suggested they were planning attacks in retaliation for upcoming military action.
A three hour gun battle is reportedly raging between security guards and attackers.
Time Magazine’s Omar Waraich points out that this is the third attack on the base since 2007.
Worryingly, the militants may have good reason to attack the base. Waraich says that the site is home of Pakistan’s nascent drone program, and a Telegraph report from 2009 said the site was thought to house Pakistan’s nuclear weapons. Saeed Shah wrote at the time:
Pakistan’s nuclear sites are tightly guarded. While experts do not think that terrorists could seize an actual nuclear bomb — the weapons are not kept in a useable form, with parts dispersed — it is possible that they could cause a fire or explosion inside a nuclear site, or perhaps seize radioactive material.
More…

 

Jim’s Mailbox

August 16, 2012, at 2:22 pm
by Jim Sinclair

Jim Sinclair’s Commentary

The following is courtesy of CIGA Craig M.

“Shadow” & “Ghost” Inventory / Negative & “Effective” Negative Equity…The Real Challenges for US Housing By Guest Author – August 16th, 2012, 7:30AM
"With nearly 50% of all mortgaged homeowners in the nation zombified (not including HELOCs), the housing market will continue to go through period of stimulus-driven demand spurts (when investors and first-timers are “activated”) followed by stimulus-hangovers (when investors and first-timers go away) until meaningful de-leveraging occurs, which will take another decade based on my math.
1) HALF of the primary housing demand cohort is “Zombified” – unable to sell and rebuy a house.
No “escape velocity” or “durable” recovery will ever occur until the repeat buyer cohort is mobilized, which will take a combination of massive debt cram downs, credit easing, and housing inflation.
Note Arizona at 66%…this is why Arizona resales are crumbling right now. July Phoenix region home sales were down 22% month-to-month and 15% year-to-year. Demand “recoveries” are not supposed to come with that type of crash volatility…short squeezes and dead-cat-bounces are, however.

2) Percentage of first liens with legacy HELOC debt
When analyzing it this way new states enter the “zombie” mix not commonly thought of as being filled with trapped homeowners.

3) Impaired Credit
Lastly, 40% of all US homeowners are either unqualified, or boderline, creditworthy meaning even if they could sell it is questionable whether they can rebuy.

More…




Jim,
When you say…
"It is not that much better now, but well hidden from the sheeple. If the can was not kicked in March 2009 then the disaster we would all be living in now would have been catastrophic.
I do not agree the right thing was done at all, but my job is to be practical in my reporting to you. If Ben Bernanke had not acted as he did we would all be back in the Dark Ages right now.
Yes nothing was accomplished in the long run because no economic recovery took place to heal the broken balance sheet."
Pure moral relativism in my opinion… what does practical mean??
We had a much better chance at survival and healing then than now as we did pre 9/11.
I guess there truly is no hope…
Regards,
CIGA Stuart


Dear Stuart,

1. That is an accurate report.
2. I clearly said the right thing was not done. In 2000 I campaigned against OTC derivatives, spending my own money in the middle 6 figures. If the right thing was done in 2008-2009 it would never have happened.
3. If the boys went into freeze frame, every major bank or investment broker would have gone insolvent in 2010
4. All the assets of the public would have been flamed.
5. Practical means seeing what is clearly.
6. Practical means seeing reality as it is.
7. Helping you can only occur if I have properly defined where we are now so I can see a way to tomorrow.
8. Gold will trade to and through $3500.
9. After the upheaval it will be back to the basics.

I no way agree with what I see. It is a mistake to think that if we had not done in 2008-2009 what Bernanke did that the outcome would be similar to little Iceland.

Yes we are lost. The same people control the action that controlled it in 2008-2009

The functional difference between Romney and Obama when serving will be close to zero.

Respectfully,
Jim

Jim Sinclair’s Commentary

CIGA Richard S. has some sage statements to share with us.

Proving that the sobriquet "dumb money" is well earned, retail investors apparently still have not figured-out gold. They are not buying gold or gold miners, even at fire sale/bargain prices.
This is dumb.
Central Banks, however, are accumulating gold like crazy. Say what you will about them, these guys aren’t dumb. They may also know exactly what is coming down the pike…
Ignore the words. Pay attention to the actions.




Hi Jim,
I have been reading JSMineset.com since the beginning and purchased several of your books, writings and videos from your website.
I am having trouble finding a broker/clearing house that will DRS my IRA accounts that I have with your "old friends that you worked with" and mentioned last week on JSMineset. They are very prompt in DRSing any of my trading account stocks, but said that their clearing house will not hold certificates in their name and mine for IRA accounts. Do any of the CIGAs that write you know of a clearing house/ broker who will do this?
Your guidance has helped my family and friends for several years. We are all proud of you.
Yours truly,
CIGA John P

Dear John,

The method for tax benefit retirement accounts is not DRS. What custodians of your program must be willing to do is to request that the retirement account be placed into certificate form in the name of the custodian and retirement account. The custodian must hold the certificate. This way there is no tax event and your asset is properly defined should a bankruptcy judge need to adjudicate it.

Many have accomplished this according to their reports.

I assure you it can be done, but the custodian must obviously work with you.

I will write an open letter to our broker readers and hope we get a good response.

Regards,
Jim

Dear Chris,

Well written but the big players understand this. The little guys read the word manipulation and they throw all their positions away. The subject in my opinion for writing it up does no one any good.

Gold is going to $3500 and beyond, about that there is no doubt.

Jim

What to Do When Every Market Is Manipulated
Hint: cut the strings by Chris Martenson
Wednesday, August 15, 2012, 10:34 AM
What do the following have in common?
LIBOR, Bernie Madoff, MF Global, Peregrine Financial, zero-percent interest rates, the Social Security and Medicare entitlement funds, many state and municipal pension funds, mark-to-model asset values, quote stuffing and high frequency trading (HFT), and debt-based money?
The answer is that every single thing in that list is an example of market rigging, fraud, or both.
How are we supposed to make decisions in today’s rigged and often fraudulent market environment? Where should you put your money if you don’t know where the risks lie? How does one control risk when control fraud runs rampant?
Unfortunately, there are no perfect answers to these questions. Instead, the task is to recognize what sort of world we happen to live in today and adjust one’s actions to the realities as they happen to be. The purpose of this report is not to stir up resentment or anger — although those are perfectly valid responses to the abuses we are forced to live with — but to simply acknowledge the landscape as it is so that we can make informed decisions.
More…





Jim,

Should we go so far as to sell positions in companies that do not allow DRS?
SLW (Silver Wheaton) is one. AUY is another.
CIGA Bob


No Bob,

It costs them little to offer this great safety device. Like CEF they can join on behalf of their shareholders. Lobby them to join, as I am sure most other shareholders are doing.

DRS is too good and too easy a means of protection to turn down. The cost to the company is minuscule, and no skin off their backs.

You bought into your investment for good reasons. You made good selections, so work with them to make it a better investment. What you are asking them to do is so easy from them and good for you.

A good CEO will listen.

Regards,
Jim

Jim Sinclair’s Commentary

To DRS or not to DRS. That is a question which might make a great difference in your life by 2015.

Jim,
Regarding direct registration versus street registration:
I started the above process as you recommended. I use Fidelity.
Fidelity’s response was they have SIPC. In addition they have insurance through Lloyds of London to insure losses above the SIPC $500,000 limit (for securities; $250,000 for cash). The limits though Lloyds covers up to 1 Billion.
Do I still need to transfer my assets from street name to direct registration? If yes, why do I need to do so?
I appreciate your time.
Thank you,
CIGA Richard

Dear Richard,

Lloyds of London itself required a reorganization not too long ago. All these guarantees are not better than the guarantor.

If one or two firms fail, all will proceed orderly probably in the manner MF and Penson is proceeding now, some saved, some lost.

If a major collapse took place, as could have in 2008-2009, you will wait in line praying for rescue until the bailout of the guarantors occurs.

Now what do you want to do? Trust in the ethics and integrity of your broker and the promise of insurance or simply not need either?

You will have a coronary while praying to god for your personal bailout. The system does not want to let you go. The system resists your attempts to be free.

You can be free of Wall Street having your assets on their books if you wish.

What is your choice?

Regards,
Jim

Eric,

Unexpected by whom? This fits our 2006 Formula perfectly

Jim

California’s Revenue Falls 10.1% Below Forecast, Chiang Says CIGA Eric
Trends from social to economic often begin in California and move across the country.  California’s unexpected revenue shortfall could be bad timing or a reflection of slowing consumer activity.  If it suggests the early stages of a consumer slowdown, the US economy and federal budget countertrend reaction will reverse and decline.  This will signal the onset of the third hemorrhage phase of global debt crisis and economic depression.
Chart:  US Federal Budget (Surplus or Deficit As A % of GDP, 12 Month Moving Average) and Gold London P.M. Fixed:
Headline:  California’s Revenue Falls 10.1% Below Forecast, Chiang Says
California tax revenue trailed forecasts in July by $475 million, or 10.1 percent below assumptions in Governor Jerry Brown’s budget, the state controller’s office said.
Controller John Chiang, in a monthly update, attributed most of the shortfall to lower-than-expected sales-tax receipts. Sales levies in the most populous state were $295 million, or 33.5 percent below the forecast in Brown’s budget.
“July’s sales-tax performance is harder to explain as it is unclear whether consumer activity has slowed or if this is an issue of timing,” Chiang’s office said in the update posted on the controller’s website. “The missed amount this month can certainly be made up in the near future.”
Source:  bloomberg.com
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Dear Jim,
It is hard to believe that the system is teetering on the brink of collapse, but I will not wait to have a bank lose my hard earned currency and my children fall slaves to a new system of debt. I will do everything I can to protect their future. I never knew what DRS was, but went though it during the internet bubble with my stock options. I had a physical certificate sent to me in my name. When I sold it, XYZ bank required a trading account be open as it was my branch to deposit the certificate (I could of used any bank but nonetheless a trading account required to be open) to sell back shares into the market. So, to get the certificate is easy when you speak to the transfer agent first to obtain instructions. This process take time when selling, and is the downfall of holding a physical certificate/share in your name as the price can change during the window of transfer/sell of the physical certificate.
Thanks,
CIGA Perry

Dear Perry,

You were lead around by the nose of stupid people. Always keep your account open with a small deposit. You instruct the transfer agent it electronically goes that day back into the DTC system and is salable by your broker. You will have the alternative of having the transfer agent arrange a sale for you. If you hold a certificate and you deliver to your broker with a signed limited power of attorney it takes one little telephone call before you can sell it. That is the truth. All else is BS. Please remember I have owned brokerage firms and know about what I speak.

Jim

Jim Sinclair’s Commentary

From CIGA Richard S
In honor of August 15, 1971 – Thanks, Dick!
"You have to choose between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of Government." - George Bernard Shaw

Looking at things another way, if you had 4 cents in 1913, you could buy exactly the same thing for $1.00 in 2012. A 96% debasement of the currency. - Thanks, Fed!


General Motors Is Headed For Bankruptcy – Again CIGA Eric
How many taxpayers funded business must fail before the public realizes something is wrong?  Bankruptcy and public funds cannot restore competitiveness, innovation, and creativity needed for international success.  These qualities exhibited by the likes of Willem Usselincx (Dutch West India Company), Bill Gates, Henry Ford, Steve Jobs, and Thomas Edison arise from the desire of great, private-sector entrepreneurs.
Headline:  General Motors Is Headed For Bankruptcy — Again
President Obama is proud of his bailout of General Motors. That’s good, because, if he wins a second term, he is probably going to have to bail GM out again. The company is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market.
Right now, the federal government owns 500,000,000 shares of GM, or about 26% of the company. It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $20.21/share on Tuesday. This left the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion.
Source:  forbes.com
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