In The News Today
Jim Sinclair’s Commentary
Main Street is in the hands of a roulette wheel and it is not going to stop.
The Western world is toast and there is no way out of the clutches of financiers that own Washington.
China is the shining example of how to stop white collar crime – make it a capital offense.
Proposal Would Rid Finance Bill of Derivatives Measure By DAMIAN PALETTA And GREG HITT
WASHINGTON—The head of the Senate Banking Committee proposed diluting a controversial provision in the Senate’s financial regulation overhaul bill that would ban banks from trading derivatives.
The move set up a fight on the Senate floor just days before a vote on the bill is expected to take place.
Sen. Christopher Dodd’s proposal puts the Connecticut Democrat at odds with Senate Agriculture Committee Chairman Blanche Lincoln (D., Ark.), who wants to force banks to spin off their derivatives trading operations into affiliates. She said Tuesday she would "fight efforts to weaken" her provision.
Mr. Dodd’s new proposal would suspend any ban for two years and give the Treasury Secretary the ability to kill the ban altogether. The banking industry has opposed the original provision to halt the trading, but its response to Mr. Dodd’s proposal was also negative. Bank officials say the two-year window, during which the future shape of trading would be left in doubt, would cast a chilling affect on the derivatives business and give foreign banks a competitive advantage over U.S. banks.
Derivatives are complex financial instruments often used to hedge risk against events such as fluctuations in interest rates or energy prices. Many lawmakers argue that bad speculative bets by banks on derivatives exacerbated the financial crisis in 2008, and that therefore the derivatives business needs closer regulation.
More…
Jim Sinclair’s Commentary
Adding debt to debt is what got the Western world in the pickle we are in.
Sarkozy is stepping into Merkel’s place to see the euro lower.
This article might have made a typo because the euro problem is not in 2016, it is more likely on or before 2011.6
Sarkozy threatened to withdraw France from the euro unless Germany vowed to back Greece By PETER ALLEN and SIMON DUKE
Last updated at 9:41 AM on 15th May 2010
French president Nicolas Sarkozy threatened to pull out of the euro if Germany did not agree to bail out crsisi-hit Greece.
The revelation revived fears over the future of the single currency, sending the euro to an 19-month low against the dollar yesterday.
Mr Sarkozy made his ultimatum at a meeting of EU leaders in Brussels last Friday to discuss the mounting eurozone debt crisis, according to reports in the Spanish press.
He apparently demanded ‘a compromise from everyone to support Greece, otherwise France will have to reconsider its position on the euro’.
A Spanish politician at the meeting, quoted by the respected Spanish daily paper El Pais, said: ‘Sarkozy went so far as to bang his fist on the table and threaten to leave the euro.’
Sarkozy, who is of Greek ancestry on his mother’s side, added: ‘If at a time like this, with everything that is happening, Europe is not capable of a united response, then the euro makes no sense.’
More…
Jim Sinclair’s Commentary
What do you think happened at $1.232 last US evening in Asia and then in Europe? Greece got their first tranche of funds on Tuesday and the ECB intervened on Wednesday.
Intervention always has bordered on a joke and was not serious in size.
Euro Intervention Would Buy ‘Time But Little Else,’ Barrow Says May 20, 2010, 3:39 AM EDT
By Keith Campbell
May 20 (Bloomberg) — Any government intervention in the foreign-exchange market to support the euro after its recent plunge would “buy policymakers time but little else,” according to Standard Bank Plc analyst Steven Barrow.
Such a move is “certainly possible” if the euro’s drop continues, Barrow, head of Group of 10 currency research in London, wrote in an e-mailed note.
“Euro zone officials believe passionately that intervention without the aid of other G7 nations, especially the U.S., is worthless,” Barrow said. “We believe that the U.S. would respond positively to any Eurogroup/ECB request for help.”
The euro was little changed at $1.24 at 8:08 a.m. in London.
More…
Jim Sinclair’s Commentary
This Elite is far from in the shadows. It is right in your face and proud of it.
Shadow Elite: Derivatives, A Horror Story Author, "Shadow Elite"
Posted: May 20, 2010 07:41 AM
Strange as it sounds, my experience mapping under-the-radar power in Communist Poland, as a social anthropologist, helped me identify a new breed of modern-day power broker here in the U.S. Unaccountable operators are increasingly shaping public policy to suit their own interests, a disturbing trend I examine in my book Shadow Elite.
But perhaps not as strange as this sounds: Gillian Tett’s fieldwork studying marriage rituals in a mountain village in Tajikistan helped her, years later, understand how risky derivatives proliferated, and went unnoticed, until they helped detonate the global financial system. Tett is also a social anthropologist by training. Now she’s a top editor/journalist for the Financial Times, by trade, and she joins others with anthropological know-how offering crucial insights on derivatives and the "dark markets" that have been key areas of combat in the financial reform fight being waged on Capitol Hill.
Tett is the author of Fool’s Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe. Last fall in Anthropology News, she made this comparison:
…bankers (like Tajik villagers) operate as a tightly defined group, with specific cultural patterns and a quasi language (or jargon) of their own. Also like Tajik villagers, bankers are generally trained to think in rigid "silos" and, as a result, find it hard to see how their overall system operates, or to see the contradictions in their own rhetoric and internal organizations.
From the outside and with hindsight, the contradictions now seem glaring. Inside this closed culture, the ideals of the free market are repeatedly espoused, but not upheld. Derivatives, the exotic financial contraptions that vastly enrich the banking business, have flourished in the shadows, not in the open marketplace.
As I discuss in Shadow Elite, bankers capitalized on this aura of unmatched complexity, ever-changing technologies, and unstoppable financial "innovation", all during an era when deregulation had become the norm. They used jargon, as Tett points out, and also a stranglehold on information as weapons to obscure, making effective oversight very difficult. She elaborated in the FT on the warring Wall Street "tribes" within a single firm, and how the derivatives tribe came to dominate.
More…
Jim Sinclair’s Commentary
The new word for going broke is "Restructure Debt"
Dubai World restructure debt. Dubai World has agreed in principle with its main creditors to restructure $23.5B of debt, though 40% of its creditors have yet to accept the deal. "The proposal puts the company on a sound financial footing and reflects the continued support of the government of Dubai and its lenders," said a key Dubai World executive, and also lifts some of the uncertainty over Dubai’s debt-laden economy.
Main Street is in the hands of a roulette wheel and it is not going to stop.
The Western world is toast and there is no way out of the clutches of financiers that own Washington.
China is the shining example of how to stop white collar crime – make it a capital offense.
Proposal Would Rid Finance Bill of Derivatives Measure By DAMIAN PALETTA And GREG HITT
WASHINGTON—The head of the Senate Banking Committee proposed diluting a controversial provision in the Senate’s financial regulation overhaul bill that would ban banks from trading derivatives.
The move set up a fight on the Senate floor just days before a vote on the bill is expected to take place.
Sen. Christopher Dodd’s proposal puts the Connecticut Democrat at odds with Senate Agriculture Committee Chairman Blanche Lincoln (D., Ark.), who wants to force banks to spin off their derivatives trading operations into affiliates. She said Tuesday she would "fight efforts to weaken" her provision.
Mr. Dodd’s new proposal would suspend any ban for two years and give the Treasury Secretary the ability to kill the ban altogether. The banking industry has opposed the original provision to halt the trading, but its response to Mr. Dodd’s proposal was also negative. Bank officials say the two-year window, during which the future shape of trading would be left in doubt, would cast a chilling affect on the derivatives business and give foreign banks a competitive advantage over U.S. banks.
Derivatives are complex financial instruments often used to hedge risk against events such as fluctuations in interest rates or energy prices. Many lawmakers argue that bad speculative bets by banks on derivatives exacerbated the financial crisis in 2008, and that therefore the derivatives business needs closer regulation.
More…
Jim Sinclair’s Commentary
Adding debt to debt is what got the Western world in the pickle we are in.
Sarkozy is stepping into Merkel’s place to see the euro lower.
This article might have made a typo because the euro problem is not in 2016, it is more likely on or before 2011.6
Sarkozy threatened to withdraw France from the euro unless Germany vowed to back Greece By PETER ALLEN and SIMON DUKE
Last updated at 9:41 AM on 15th May 2010
French president Nicolas Sarkozy threatened to pull out of the euro if Germany did not agree to bail out crsisi-hit Greece.
The revelation revived fears over the future of the single currency, sending the euro to an 19-month low against the dollar yesterday.
Mr Sarkozy made his ultimatum at a meeting of EU leaders in Brussels last Friday to discuss the mounting eurozone debt crisis, according to reports in the Spanish press.
He apparently demanded ‘a compromise from everyone to support Greece, otherwise France will have to reconsider its position on the euro’.
A Spanish politician at the meeting, quoted by the respected Spanish daily paper El Pais, said: ‘Sarkozy went so far as to bang his fist on the table and threaten to leave the euro.’
Sarkozy, who is of Greek ancestry on his mother’s side, added: ‘If at a time like this, with everything that is happening, Europe is not capable of a united response, then the euro makes no sense.’
More…
Jim Sinclair’s Commentary
What do you think happened at $1.232 last US evening in Asia and then in Europe? Greece got their first tranche of funds on Tuesday and the ECB intervened on Wednesday.
Intervention always has bordered on a joke and was not serious in size.
Euro Intervention Would Buy ‘Time But Little Else,’ Barrow Says May 20, 2010, 3:39 AM EDT
By Keith Campbell
May 20 (Bloomberg) — Any government intervention in the foreign-exchange market to support the euro after its recent plunge would “buy policymakers time but little else,” according to Standard Bank Plc analyst Steven Barrow.
Such a move is “certainly possible” if the euro’s drop continues, Barrow, head of Group of 10 currency research in London, wrote in an e-mailed note.
“Euro zone officials believe passionately that intervention without the aid of other G7 nations, especially the U.S., is worthless,” Barrow said. “We believe that the U.S. would respond positively to any Eurogroup/ECB request for help.”
The euro was little changed at $1.24 at 8:08 a.m. in London.
More…
Jim Sinclair’s Commentary
This Elite is far from in the shadows. It is right in your face and proud of it.
Shadow Elite: Derivatives, A Horror Story Author, "Shadow Elite"
Posted: May 20, 2010 07:41 AM
Strange as it sounds, my experience mapping under-the-radar power in Communist Poland, as a social anthropologist, helped me identify a new breed of modern-day power broker here in the U.S. Unaccountable operators are increasingly shaping public policy to suit their own interests, a disturbing trend I examine in my book Shadow Elite.
But perhaps not as strange as this sounds: Gillian Tett’s fieldwork studying marriage rituals in a mountain village in Tajikistan helped her, years later, understand how risky derivatives proliferated, and went unnoticed, until they helped detonate the global financial system. Tett is also a social anthropologist by training. Now she’s a top editor/journalist for the Financial Times, by trade, and she joins others with anthropological know-how offering crucial insights on derivatives and the "dark markets" that have been key areas of combat in the financial reform fight being waged on Capitol Hill.
Tett is the author of Fool’s Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe. Last fall in Anthropology News, she made this comparison:
…bankers (like Tajik villagers) operate as a tightly defined group, with specific cultural patterns and a quasi language (or jargon) of their own. Also like Tajik villagers, bankers are generally trained to think in rigid "silos" and, as a result, find it hard to see how their overall system operates, or to see the contradictions in their own rhetoric and internal organizations.
From the outside and with hindsight, the contradictions now seem glaring. Inside this closed culture, the ideals of the free market are repeatedly espoused, but not upheld. Derivatives, the exotic financial contraptions that vastly enrich the banking business, have flourished in the shadows, not in the open marketplace.
As I discuss in Shadow Elite, bankers capitalized on this aura of unmatched complexity, ever-changing technologies, and unstoppable financial "innovation", all during an era when deregulation had become the norm. They used jargon, as Tett points out, and also a stranglehold on information as weapons to obscure, making effective oversight very difficult. She elaborated in the FT on the warring Wall Street "tribes" within a single firm, and how the derivatives tribe came to dominate.
More…
Jim Sinclair’s Commentary
The new word for going broke is "Restructure Debt"
Dubai World restructure debt. Dubai World has agreed in principle with its main creditors to restructure $23.5B of debt, though 40% of its creditors have yet to accept the deal. "The proposal puts the company on a sound financial footing and reflects the continued support of the government of Dubai and its lenders," said a key Dubai World executive, and also lifts some of the uncertainty over Dubai’s debt-laden economy.
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