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Jim Sinclair thread (News & Views)

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Seeing that you had posted on this thread, for a moment I thought you had become a CIGA, and joined the brotherhood as a fellow cult member. Your going to be spectacularly sick when he is correct, 100% gauranteed! I'll get the popcorn...

LOL

There's not much chance of me signing up as a CIGA.

You might have a few interesting moments on the Gold rollercoaster.

 

I do own Gold, and make money when it goes up, and try to buy more on dips, sell some on rallies

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LOL

There's not much chance of me signing up as a CIGA.

You might have a few interesting moments on the Gold rollercoaster.

 

I do own Gold, and make money when it goes up, and try to buy more on dips, sell some on rallies

 

I like that you have a sense of humour :) I must admit, I know what you mean about him with all this "dear extended family and CIGA stuff" but I put that down to his American culture which I find quite awful, in the same way as many of thier films, comedy and chat shows. The same as the way they need music on information videos to add "emotional feeling". I agree he has an agenda, a gold mine and lots of gold. But fundamentally I think he is correct.

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I avoid this thread mostly - It makes me gnash my teeth.

 

About why I think he has exaggerated the risk of Greek Derivatives:

Press reports say that there are only about Eur.3 Billion of derivatives backing Greek Debt. This isn't a scary number to me. If JS has a different figure, he should acknowledge the 3bn in most press commentary, and show how he has come up with a different amount.

 

Since he hasnt done that, I think his intention is mere scare-mongering.

 

(Wow, I wish someone still in the derivatives business would come in here and wipe the floor with Mr Sinclair, as I used to hear them do at Chase about the outrageous claims from GATA etc. By comparison to what I heard, I have been extremely polite about Mr.Gold.

 

For instance, GATA used to look at reported short Gold futures positions of the big banks, and then just forget that they were in the business of hedging gold price risk for their Gold miner clients. And that "natural" position of buying future gold position from Gold miners simply required them to be short somewhere else to balance those longs. Of course they were big shorts on futures. GATA would never mention that. GATA would also never mention that banks have strict limits on the size of their proprietary risks they can take in any market. So their net shorts (or net longs) were a tiny, tiny proportion of their overall reported futures position.)

 

At times, Reading the commentary of JS is like reading the ravings of an unschooled teenager... sometimes. I am sorry to tell you, but that is the truth that any genuine expert of derivatives would tell you. Too many people heere seem to respect someone who often just flames out nonsense. It makes me rather ill to see it.

 

JS example:

"more than now 20 trillion dollars worth of liquidity required to fund the winners who have benefited mightily from that windfall we financed..."

WTF is he talking about? Did he pull that figure out of the air?

There is no justification whatsoever to think that banks have "winnings" of 20 trillion dollars on derivative contracts. He is very, very confused, or is intentionally misleading people. These sort of big numbers come from Gross, Face Amounts of derivative exposures that I have explained many times on this website. The Net Risk is a tiny portion of the headline figures, and Sinclair knows that or should know it.

 

Call a spade a spade, and just acknowledge here that he is a "King-of-Horsefeathers". (I am being far more polite than I should be.)

 

There are some real risks in the Greek situation and in Europe. Several of us are writing about them on other threads. But throwing around meaningless large numbers contributes nothing but confusion to the conversation.

 

Thanks - I do see what you mean about scaremongering by JS. But I have read that although the derivative positions net out to smaller amounts, the problems will arise when if/when CDS is triggered because there will be counterparty risk that is not taken into account. ie. the people who should be paying the CDS are involved in a daisy chain of hedges and many of the counterparties to these contracts do not have the cash to pay without collecting first.

 

I suspect the central banks would be called in to sought the mess out with major printing.

 

As far as GATA is concerned they obviously have an overt reason to show manipulation in the market, that is why they exist. Whether it is true or not I don't know, but to be honest as there is nothing I can do about it I'm not going to worry myself unduly.

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Jim Sinclair’s Commentary

 

The important unanswered question is "Where is the money coming from?"

 

The answer is from the global Western world lender of last resort, the US Federal Reserve. This was just proven.

 

As far as the dollar is concerned, no one is focused on the "utilization" that is fading fast and will negatively impact the value of the US dollar in 2012.

 

 

http://www.youtube.com/watch?v=NOzR3UAyXao&feature=player_embedded

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...I put that down to his American culture which I find quite awful

Oh, thanks so much. Haha

 

I agree he has an agenda, a gold mine and lots of gold. But fundamentally I think he is correct.

I admit: he has been right about a long upwards trend in Gold so far. And I could see him continue to be right about that for some time. If he can get people at/near the top, then I will have to admit a certain respect. But we do not yet know if he will do that.

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Bubb, I really don't quite get your problem with JS. And he doesn't even have a forum...

 

The biggest problem I have with his writings is his "notional value becomes real value" explanation, it could be clearer (so we can check if it's true). He is right to some extent though: Greek CDS should be worth 100% right now, but they are worth 0. So, the loss is max for those liable, but they law-arbitraged away their duties (ISDA), so now what got maxed out is the negative side. The holders have lost 100% of the value those derivatives should have had.

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The biggest problem I have with his writings is his "notional value becomes real value" explanation, it could be clearer (so we can check if it's true). He is right to some extent though: Greek CDS should be worth 100% right now, but they are worth 0

Here's how I would do the maths:

 

+ A CDswap is a sort of "insurance policy", which has zero value, if there is no triggering event of Default

 

+ If CDswaps are outstanding in Eur 3 Billion of debt, and an Event of Default takes place, when a 70% haircut is agreed on the debt, then the holders of that debt should expect to receive payments equal to the size of impairment, which is Eur 3 Billion x 70% = Eur 2.1 Billion.

 

+ The "haircut" is being characterised as a Voluntary restructuring, and thus not an qualifying Event of Default, so those potential payments of Eur 2.1 Billion, are not being paid. In effect, the insurance claims are being denied. This means an opportunity loss of Eur 2.1 billion for the holders of the Greek CDS, and an equivalent size savings for the writers of that insurance.

 

I don't see how this a a huge deal for Global markets as a whole.

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Here's how I would do the maths:

 

+ A CDswap is a sort of "insurance policy", which has zero value, if there is no triggering event of Default

 

+ If CDswaps are outstanding in Eur.3 Billion of debt, and an Event of Default takes place, when a 70% haircut is agreed on the debt, then the holders of that debt should expect to receive payments equal to the size of impairment, which is Eur.3 Billion x 70% = Eur.2.1 Billion.

 

+ The "haircut" is being characterised as a Voluntary restructuring, and thus not an qualifying Event of Default, so those potential payments of Eur 2.1 Billion, are not being paid. In effect, the insurance claims are being denied. This means an opportunity loss of Eur 2.1 billion for the holders of the Greek CDS, and an equivalent size savings for the writers of that insurance.

 

I don't see how this a a huge deal for Global markets as a whole.

 

 

As it is the owners of Greek debt have not been paid out on there CDswops, If a CDswop is insurance on a loan defult then they should now be paid out. They are not because the Greek deal are not classed as a defult. This could be a huge deal for the golbal markets as TPTB have now proved to everyone that there is a way out of the debt without triggering any default. CDswops are now not really worth anything. I would not buy one and i now belive that traders will stop buying them.

 

If the insurance of goverment debt is worth 0 (unless they say so) whats the point in buying it?

Now without haveing any insurance on teh debt, I belive that its going to cost Govermnets more money to borrow in teh markets. With a far higher price for teh euro countrys.

What is there now to stop other PIIGS who are finding the there debt to hard to service givving everyone a 70% hair cut ?

 

Could someone let me know if im right in my thinking ?

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As it is the owners of Greek debt have not been paid out on there CDswops, If a CDswop is insurance on a loan defult then they should now be paid out. They are not because the Greek deal are not classed as a defult. This could be a huge deal for the golbal markets as TPTB have now proved to everyone that there is a way out of the debt without triggering any default. CDswops are now not really worth anything. I would not buy one and i now belive that traders will stop buying them.

 

If the insurance of goverment debt is worth 0 (unless they say so) whats the point in buying it?

Now without haveing any insurance on teh debt, I belive that its going to cost Govermnets more money to borrow in teh markets. With a far higher price for teh euro countrys.

What is there now to stop other PIIGS who are finding the there debt to hard to service givving everyone a 70% hair cut ?

 

Could someone let me know if im right in my thinking ?

 

OK I'M going to take your spelling head on.

 

It is hard for me to read it. I have to read it twice sometimes. That means that I spend time re reading your posts ; time which you could spend correcting them.

 

If you are telling me you are dyslexic get a fecking spell check add on.

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...whats the point in buying it?

Now without haveing any insurance on teh debt, I belive that its going to cost Govermnets more money to borrow in teh markets. With a far higher price for teh euro countrys.

What is there now to stop other PIIGS who are finding the there debt to hard to service givving everyone a 70% hair cut ?

 

Could someone let me know if im right in my thinking ?

Perhaps part if the reason that ISDA officials are trying to call this a Non-default is to undermine the CDS insurance, and get the marlet to stop using CDS to speculate against sovereign debts. It seems like a strange behaviour: Undermining one of your own products. But I do think these things were a serious thread to the system, and traders were using them as an instrument to push down Sovereign debt prices.

 

The next (sensible) step might be to design a product where the CDS insurance only pays out when the CDS is handed over together with the same Face Amount of debt. Thus, the shorts would only pay out whem they are used as true insurance, and not just for speculation and market manipulation. If I were still part if the banking system, I would be working on a more prudent product like that.

=== ===

 

Note: Hal I do agree that you should make a better effort to improve your spelling here, to show respect to the readers of your posts. You have many good ideas which are often undermined by your erratic spelling.

 

The product I designed (oil swaps) has never blown up. Though some might argue that interations of that product helped to push oil to $146 in 2008, since it brought buyers into the crude market who were hedging indirect and long term exposures to crude. I understand that argument. But I also think it now leaves the overall energy market with a better balance.

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Halight, my spelling is not very good either. Not as bad as yours as I read my comments and correct them before |I post and I use Firefox with a spell checker. This underlines words that it thinks are incorrect in their spelling. When you right click over the word it suggests the word you are thinking of with the correct spelling. I find that this reminds me of the correct spelling and so I make fewer mistakes. I try to make a note of how a word is spelled. Im not sure if Internet explorer has it but I would think it has.

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If you use firefox you can get the 'british english dictionary' add on which saves me no end of poor spelling...

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Jim Sinclair continues:

“The BIS confirms, in the area of CDS’s the total outstanding is approximately $37 trillion. So I believe the reports being given about this just being a small and modest market event is false. As a market observer and having more than 50 years in the business, the real number is at least 50% or more of the existing $37 trillion that is related to Greece.

== ==

 

It seems to me, this is like comparing grapes with watermelons. I don't really know why JS is so prone to exaggeration, but it does seem to be a character flaw to me.

 

As I have explained before else where: when A sells a stock to B and then on to C, only C is left with an exposure,

 

But when A sells an OTC derivative to B and then on to C, they all three retain the exposure until the derivative contract expires. This is why the numbers look so g0dd@m big. But at maturity the face amount will not flow from C to B to A, only a the net difference, and differences between dozens, or hundreds, or thousands of derivative payments will be netted out, and only the very tiny net of net amount will be payable. $37 Trillion will dissolve down to a few piddling Billion of risk amongst parties that can afford it.

 

That will only NOT be true if one party has been very poor in its trading, and thus owes losses up and down the street to many others. AIG was a rare party like that because it was AAA rated for so long, and also as a largely unregulated party (outside banking law) ran its business in such a reckless fashion, losing tonnes of money.

 

I believed that JS is either lying, or he is stupid, or he is merely scaremongering to help ramp gold prices. After some time, I have come to the conclusion that he is scaremongering. Is there any real evidence to the contrary?

 

If you don't understand what I have said, is JS any clearer? Why should you believe him ahead of me, when I was a professional in the derivative field working for Chase, and he never had such a position?

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Halight, my spelling is not very good either. Not as bad as yours as I read my comments and correct them before |I post and I use Firefox with a spell checker. This underlines words that it thinks are incorrect in their spelling. When you right click over the word it suggests the word you are thinking of with the correct spelling. I find that this reminds me of the correct spelling and so I make fewer mistakes. I try to make a note of how a word is spelled. Im not sure if Internet explorer has it but I would think it has.

 

 

Im now posting using Safari. I could not get the spell checker to work in IE 9. Im now using the spell checker in safari.

 

I hope this helps other members to understand what im trying to say.

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Jim Sinclair continues:

“The BIS confirms, in the area of CDS’s the total outstanding is approximately $37 trillion. So I believe the reports being given about this just being a small and modest market event is false. As a market observer and having more than 50 years in the business, the real number is at least 50% or more of the existing $37 trillion that is related to Greece.

== ==

 

It seems to me, this is like comparing grapes with watermelons. I don't really know why JS is so prone to exaggeration, but it does seem to be a character flaw to me.

 

As I have explained before else where: when A sells a stock to B and then on to C, only C is left with an exposure,

 

But when A sells an OTC derivative to B and then on to C, they all three retain the exposure until the derivative contract expires. This is why the numbers look so g0dd@m big. But at maturity the face amount will not flow from C to B to A, only a the net difference, and differences between dozens, or hundreds, or thousands of derivative payments will be netted out, and only the very tiny net of net amount will be payable. $37 Trillion will dissolve down to a few piddling Billion of risk amongst parties that can afford it.

 

That will only NOT be true if one party has been very poor in its trading, and thus owes losses up and down the street to many others. AIG was a rare party like that because it was AAA rated for so long, and also as a largely unregulated party (outside banking law) ran its business in such a reckless fashion, losing tonnes of money.

 

I believed that JS is either lying, or he is stupid, or he is merely scaremongering to help ramp gold prices. After some time, I have come to the conclusion that he is scaremongering. Is there any real evidence to the contrary?

 

If you don't understand what I have said, is JS any clearer? Why should you believe him ahead of me, when I was a professional in the derivative field working for Chase, and he never had such a position?

 

 

 

 

 

I dont have a clue were he gets that number from. Iv have never read anything from anyone else or from any of the MSM that has a number anywhere near that size.

 

 

The only thing i can think of, could be something like iv posted before. I posted about everything being so interlinked in the world that we live in. If one thing fails it could couse other things too fail which then would in turn make other things fail. And so on. I belive that only then when most of the system has failed that you would get a number like that. It just seems too high a number

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Sinclair going on record: March 9th

 

http://kingworldnews.com/kingworldnews/Broadcast/Entries/2012/3/9_Jim_Sinclair.html

 

"The Euro will be around for a long time."

"The Dollar will break support this year at DXY-80, and then DXY-72."

"The Dollar has plenty of room on the downside below 70-72."

"There may be a bounce, but not above 78-80, and then 70 will be broken."

"Below that... we will be getting a new currency."

 

GOLD:

"Central banks are aiming, not to break gold, but keep it from running away."

"$2100 is the magnet pulling on the Gold price now."

"$1760 is the area that banks want to keep it from running away."

"There is big buying support at $1650."

 

== ==

 

All these targets are baffling to me.

I much prefer the SENSE spoken by Bill Fleckenstein:

 

http://kingworldnews.com/kingworldnews/Broadcast/Entries/2012/3/6_Bill_Fleckenstein.html

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India to make 45% of Iran oil payments in rupees

JS - Don’t take this lightly as international settlement is the heart and soul of a reserve currency. The dollar has lost its soul to the demonic banksters and will have a coronary this year. .80 to .82 USDX is where the in the know are selling.

 

http://www.jsmineset.com/2012/03/10/in-the-news-today-1127/

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Sinclair going on record: March 9th

http://kingworldnews.com/kingworldnews/Broadcast/Entries/2012/3/9_Jim_Sinclair.html

 

"The Euro will be around for a long time."

"The Dollar will break support this year at DXY-80, and then DXY-72."

"The Dollar has plenty of room on the downside below 70-72."

"There may be a bounce, but not above 78-80, and then 70 will be broken."

"Below that... we will be getting a new currency."

But WHAT IF Mr Sinclair is WRONG about the Dollar? (Could he be peddling horsefeathers... again?)

Suppose the Dollar rises instead? Then Gold may fall, perhaps back to $1650, even $1550 and lower

 

Here's UUP, the 2X Dollar etf versus GLD/Gold ... update

 

uupvsgld.png

 

In the above chart UUP closed on Friday at $22.26 ... update

 

uup.png

 

... And was threatening to break out over the 76d-MA.

This coming week should be interesting.

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But WHAT IF Mr Sinclair is WRONG about the Dollar? (Could he be peddling horsefeathers... again?)

Suppose the Dollar rises instead? Then Gold may fall, perhaps back to $1650, even $1550 and lower

 

Here's UUP, the 2X Dollar etf versus GLD/Gold ... update

 

uupvsgld.png

 

In the above chart UUP closed on Friday at $22.26 ... update

 

uup.png

 

... And was threatening to break out over the 76d-MA.

This coming week should be interesting.

 

 

I listened to the king world news podcast that sinclair talked and the euro and the dollar.

 

Iv only just started in the last two weeks to download the king world news. Not sure what I think about them yet. Their dose seem to be a bit of ramping on them But after all it is a bulls podcast so I do expect some of that. I have taken some info away from the ones that I have listened too. So I will for the time be carry on with them..

 

Dr B can you keep us up to date with how the dollar is doing and then we can see if he was right, If it turns out he is wrong then thats fair enough. Everyone cannot be right all the time. Im not a follower of his. There is something about him that I do not really like but Im not sure what it is.

But it would be an idea to keep record on his calls to see how many times he gets it right. And wrong. The record needs to be fair with charts and stuff for all to see. Then the people that are left here now can make their own minds up..

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Sinclair going on record: March 9th

 

http://kingworldnews...m_Sinclair.html

 

"The Euro will be around for a long time."

"The Dollar will break support this year at DXY-80, and then DXY-72."

"The Dollar has plenty of room on the downside below 70-72."

"There may be a bounce, but not above 78-80, and then 70 will be broken."

"Below that... we will be getting a new currency."

 

GOLD:

"Central banks are aiming, not to break gold, but keep it from running away."

"$2100 is the magnet pulling on the Gold price now."

"$1760 is the area that banks want to keep it from running away."

"There is big buying support at $1650."

 

== ==

 

All these targets are baffling to me.

I much prefer the SENSE spoken by Bill Fleckenstein:

 

http://kingworldnews...eckenstein.html

 

Why do you think these targets are baffling?

 

Another/ FOA said these very things in 1997.

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But WHAT IF Mr Sinclair is WRONG about the Dollar? (Could he be peddling horsefeathers... again?)

Suppose the Dollar rises instead? Then Gold may fall, perhaps back to $1650, even $1550 and lower

 

Here's UUP, the 2X Dollar etf versus GLD/Gold ... update

 

 

 

In the above chart UUP closed on Friday at $22.26 ... update

 

 

 

... And was threatening to break out over the 76d-MA.

This coming week should be interesting.

 

As we approach the end game, gold is expected to rise along with the dollar. If you refer to Exters pyramid, it should be self explanatory.

 

Take it from me right now, gold price will fall all the way to perhaps 200$/oz. You wont get any physical gold at this price however. Not that this last sentence matters to you any more.

 

Jim Sinclair is looking at a macro picture. Your point of view perhaps is a bit narrow in its scope.

 

 

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I listened to the king world news podcast that sinclair talked and the euro and the dollar.

 

Iv only just started in the last two weeks to download the king world news. Not sure what I think about them yet. Their dose seem to be a bit of ramping on them But after all it is a bulls podcast so I do expect some of that. I have taken some info away from the ones that I have listened too. So I will for the time be carry on with them..

 

Dr B can you keep us up to date with how the dollar is doing and then we can see if he was right, If it turns out he is wrong then thats fair enough. Everyone cannot be right all the time. Im not a follower of his. There is something about him that I do not really like but Im not sure what it is.

But it would be an idea to keep record on his calls to see how many times he gets it right. And wrong. The record needs to be fair with charts and stuff for all to see. Then the people that are left here now can make their own minds up..

 

1650 $/oz 10 years before it hit the target is a good enough prognosticator of his abilities.

 

Halight please tell us about your investment preferences. Are you a trader? Or do you have a job?

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