Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-62142 Tue, 25 Apr 2017 22:44:33 GMT Trump is caving on border wall funding after showing his base that he tried http://implode-explode.com/viewnews/2017-04-25_Trumpiscavingonborderwallfundingaftershowinghisbasethathetried.html Last night the president backed off his demand that any deal to fund the federal government include money to start construction on his border wall. At an event with conservative journalists, Trump said he's okay waiting until September to have this fight.

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Even after he realizes the border wall is infeasible, he is unlikely to ever acknowledge it publicly because it was such a central rationale of his candidacy. "I will build a great wall," Trump promised in his June 2015 announcement speech. "And nobody builds walls better than me, believe me. ... And I will make Mexico pay for that wall. Mark my words." (The Huffington Post created a timeline tracking his promises on the wall over the past two years.)

-- The president's aides have convinced him that he can present a little bit of money for border security, especially technology and more agents, as a victory. And he will avert a government shutdown that would have raised questions about his competence and basic leadership ability, especially with the GOP in total control of Washington. Trump has already begun taking credit for a drop in illegal border crossings and a reduction in crime along the border. He says his tough enforcement policies are deterring many from trying to enter the country.

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iehi-feed-62141 Tue, 25 Apr 2017 16:45:58 GMT Desperate "Naked selfie" Loans Proliferate on Chinese Platforms http://implode-explode.com/viewnews/2017-04-25_DesperateNakedselfieLoansProliferateonChinesePlatforms.html Interest on the "nude loans" reached an astonishing 30 percent a week, according to the Global Times newspaper. Lenders told female borrowers that if they failed to repay the loans, their nude photos would be sent to their families and friends, whose information was also required for some transactions, the article said.

Material in the file put on the web last Wednesday showed some borrowers also promised to repay loans with sexual favours, according to screen captures posted on social media websites.

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iehi-feed-62140 Tue, 25 Apr 2017 16:05:10 GMT The oil market has one big problem: People aren't buying enough gas http://implode-explode.com/viewnews/2017-04-25_TheoilmarkethasonebigproblemPeoplearentbuyingenoughgas.html iehi-feed-62139 Tue, 25 Apr 2017 16:03:17 GMT China Markets Reel as $1.7 Trillion in Shadow Funds Unwinds http://implode-explode.com/viewnews/2017-04-25_ChinaMarketsReelas17TrillioninShadowFundsUnwinds.html The turbulence has centered on so-called entrusted investments -- funds that Chinese banks farm out to external asset managers. After years of funneling money into such investments, banks are now pulling back in response to a series of regulatory guidelines over the past three weeks that put a spotlight on the risks. Critics have blamed entrusted managers for adding leverage to China's financial system and reducing transparency.

The banks' withdrawals helped erase $315 billion of stock market value over the past six days and sent bond yields to the highest level in nearly two years, highlighting the challenge for Chinese authorities as they try to rein in shadow banking activity without destabilizing financial markets. While the government has plenty of firepower to prop up asset prices if it wants to, forecasters at Australia & New Zealand Banking Group Ltd. predict the selloff will deepen this year.

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iehi-feed-62138 Tue, 25 Apr 2017 02:58:01 GMT Trump seeks 15 percent corporate tax rate, even if it swells the national debt http://implode-explode.com/viewnews/2017-04-24_Trumpseeks15percentcorporatetaxrateevenifitswellsthenationaldebt.html President Trump is pursuing a drastic cut in the corporate tax rate, a move that is likely to grow the national debt and breach a long-held Republican goal of curbing federal borrowing.

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Trump surprised lawmakers -- and even many advisers -- last week when he announced he would release details of his tax plan on Wednesday. Advisers said Trump is eager to make a mark on a top issue before the 100-day anniversary of his administration, after being frustrated by House Republicans over the failure to advance legislation to replace the Affordable Care Act.

But several House Republicans close to Ryan said that they were taken aback by the latest tax push. They said the president risked alienating the speaker and his allies on Capitol Hill if they got behind a proposal that had weak or fragile support in the chamber, and they expressed concern about Congress piling up too many issues this week, such as a revived effort to pass a health-care overhaul and keep the government funded while funneling money toward border security projects.

... lawmakers from both parties have said the corporate tax rate must be reduced to help U.S. companies compete with firms headquartered in other countries and to prevent U.S. firms from moving overseas.

The Tax Policy Center, a nonpartisan tax group affiliated with the Brookings Institution and Urban Institute, has estimated that Trump's corporate tax proposal, as outlined during the campaign, would cost $2.4 trillion over 10 years.

"Deficits don't matter"!

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iehi-feed-62137 Tue, 25 Apr 2017 01:51:44 GMT Wells Fargo Boardroom Showdown Looms, Pitting Ever-Smug Buffett vs. Public Pension Funds http://implode-explode.com/viewnews/2017-04-24_WellsFargoBoardroomShowdownLoomsPittingEverSmugBuffettvsPublicPe.html Giant pension funds -- like Calpers, which manages the retirement funds of California's public employees, and its New York City counterpart -- are planning to vote against most of Wells's 15 board members, saying they failed in their duties to oversee the company.

The bank does have one influential ally: Warren Buffett, whose firm, Berkshire Hathaway, owns about 10 percent of the company's shares. He has signaled that he intends to back the incumbent board, and his support could ultimately carry more weight than that of investors like pension funds, which tend to be more vocal in their criticism.

As of late Monday, a few large shareholders were leaning toward voting against some board members. (Two people joined the board in February, after the scandal had been widely exposed.)

"If there is a serious failure in oversight, directors need to be held accountable," said Scott M. Stringer, the New York City comptroller. He helps oversee the city's pension funds, which are planning to vote against nine of the bank's 15 directors.''

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The vote is not only a serious challenge for Wells, one of the nation's largest banks. It is also a test for a decades-long movement among certain shareholders who have been pushing to hold corporate leaders more accountable.

"If we're serious about board accountability in this country, it's hard to understand the case for keeping these directors," said Robert J. Jackson, a professor at Columbia Law School and the director of the school's program on corporate law and policy.

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Yet for all the scandals that have rattled corporate America over the past decade -- such as those in the mortgage market and the media industry -- it is extremely rare for a board to take the fall.

In related news, the Fed and the FDIC have approved Wells' "living will" plans.

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iehi-feed-62136 Tue, 25 Apr 2017 00:32:18 GMT Miami Is Spelling Doom for the Real Estate Market http://implode-explode.com/viewnews/2017-04-24_MiamiIsSpellingDoomfortheRealEstateMarket.html ... more than 11,000 new condos [are] scheduled to hit Miami's market by 2018. That's about 70% more condo units than Miami already has. This is going to be like pouring jet fuel on a raging fire. And yet speculators continue to "flip" condos across the city.''

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It's happening all across Florida, Las Vegas, and Atlanta. It's also happening in small U.S. cities like Fresno, California and Tacoma, Washington.

According to real estate site Trulia, more than 6% of home sales last year were "flips." These are properties that have sold at least twice in the past years.

That's up 5.3% from a year ago. More importantly, we're now seeing the highest level of flipping activity since 2006...which was the peak of the last housing bubble. This is a big deal. It tells us that the U.S. housing market is likely in the late stages of a bull market.

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iehi-feed-62135 Mon, 24 Apr 2017 23:22:57 GMT What of Suburban Real Estate With Millennials Favoring Cities? http://implode-explode.com/viewnews/2017-04-24_WhatofSuburbanRealEstateWithMillennialsFavoringCities.html ... if Millennials aren't earning enough to buy pricey homes, who is going to buy the tens of millions of houses Baby Boomers will be selling as they downsize/move to assisted living? As for inheriting Mom and Dad's house--that's not likely if Mom or Dad need the cash to fund their retirement/assisted living.

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Anecdotally, I can't think of a single individual in their 20s or 30s that I know personally who has bought a house in a distant suburb. Everyone in this age group has bought a house in an urban zone. Not a highrise condo in the city center, but a house in a ring city near public transport.

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iehi-feed-62134 Mon, 24 Apr 2017 21:08:58 GMT Mayor to subsidise 'naked' homes solution to London housing crisis http://implode-explode.com/viewnews/2017-04-24_MayortosubsidisenakedhomessolutiontoLondonhousingcrisis.html ... the Enfield homes would be about 15% cheaper to build than standard new homes because of their basic design.

"They will have a functioning sink and bathroom, but what they won't have is every interior wall or things like fitted coffee machines [which housebuilders often include]," he said.

Costs will be cut further because buyers will not have to pay for the land in the purchase price. The freehold will be retained by the council and owners will pay annual ground rent.

The plan is to ensure that the homes are cheap enough that buyers will only need to spend a third of their gross income on mortgage payments -- a widely used definition of "genuinely affordable" housing. Subject to planning consent, the apartments could be ready for occupation in 2020.

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The austere designs fit with a trend for minimal living among millennials forced upon them in part by a lack of disposable income because of high rents and property prices.

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iehi-feed-62133 Mon, 24 Apr 2017 19:37:31 GMT "Fear City" Explores U.S. Instance of "Shock Doctrine" -- And Trump's Connection To It http://implode-explode.com/viewnews/2017-04-24_FearCityExploresUSInstanceofShockDoctrineAndTrumpsConnectionToIt.html New York's debt crisis is an incredibly important and little understood chapter in the evolution of what Nobel Prize-winning economist Joseph Stiglitz calls market fundamentalism, a process the Trump administration is in the process of rapidly accelerating, which is why I was so happy to receive Kim Phillips-Fein's remarkable new book, "Fear City." In it, she meticulously documents how the remaking of New York City in the '70s was a prelude to what would become a global ideological tidal wave, one that has left the world brutally divided between the 1 percent and the rest. She helps us to understand many of the forces that Trump exploited to win the White House, from economic insecurity to crumbling public infrastructure to fearmongering about black crime, all amid previously unimaginable private wealth.

But one of the things that really stood out for me in the book is what it reveals about Trump himself. "Fear City" tells the story of how a brash 29-year-old real estate developer seized on the city's misfortune to boost his own fortune, extracting predatory terms from a community in crisis.

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iehi-feed-62132 Mon, 24 Apr 2017 16:00:11 GMT Euro and shares rally after Emmanuel Macron wins first voting round of French election http://implode-explode.com/viewnews/2017-04-24_EuroandsharesrallyafterEmmanuelMacronwinsfirstvotingroundofFrenc.html "Macron will be reassuring to markets, with his pledge to lower corporate taxes and to lighten the administrative burden on firms. He basically represents continuity," said Octavio Marenzi, CEO of Opimas, a capital markets management consultancy.

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According to the latest polling of voters' intentions in the second round, Mr Macron is forecast to beat Ms Le Pen by 62 per cent to 38 per cent, with many political figures quick to join the 'anyone but Le Pen camp'.

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iehi-feed-62131 Mon, 24 Apr 2017 15:56:06 GMT Dividend Cuts Hit High For Past 4 Years; Suggest Economy In Contraction http://implode-explode.com/viewnews/2017-04-24_DividendCutsHitHighForPast4YearsSuggestEconomyInContraction.html iehi-feed-62130 Mon, 24 Apr 2017 14:23:52 GMT America is Regressing into a Developing Nation for Most People http://implode-explode.com/viewnews/2017-04-24_AmericaisRegressingintoaDevelopingNationforMostPeople.html iehi-feed-62129 Mon, 24 Apr 2017 14:18:18 GMT Trump push for border wall threatens to cause government shutdown http://implode-explode.com/viewnews/2017-04-24_Trumppushforborderwallthreatenstocausegovernmentshutdown.html Looming above Washington as Congress and the White House attempt to avert a funding shutdown in only five days' time, Donald Trump's central campaign promise to build a wall on the Mexican border threatens to bring the US government to a halt this week in a national display of dysfunction

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The president himself waded into the negotiations on Sunday, holding out two sticks and no carrot. "ObamaCare is in serious trouble," he tweeted. "The Dems need big money to keep it going -- otherwise it dies far sooner than anyone would have thought."

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Trump's threats did not appear to faze Democratic leaders, who watched last month as Republicans failed to make a deal within their own party on repealing and replacing Barack Obama's healthcare reform

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iehi-feed-62128 Sun, 23 Apr 2017 20:54:13 GMT Broken Employment http://implode-explode.com/viewnews/2017-04-23_BrokenEmployment.html iehi-feed-62127 Sun, 23 Apr 2017 20:32:32 GMT Trump Has To Pay For Tax Cuts -- But Will He Touch Real Estate Give-Aways? http://implode-explode.com/viewnews/2017-04-23_TrumpHasToPayForTaxCutsButWillHeTouchRealEstateGiveAways.html "Trump said he knows where the loopholes are, but so far he hasn't proposed closing any of them," Mr. Rosenthal said. "Maybe he will. But so far he hasn't made any of the hard decisions that would show he's willing to close the loopholes that benefit him in order to make the tax code more fair and efficient."

... it is hard to see a path toward reducing overall corporate tax rates -- the crucial element in making any overhaul palatable to a wide swath of businesses -- without the added revenues from eliminating the interest deduction.

(Individuals generally cannot deduct interest payments -- with the major exception of mortgage interest, another boon to the real estate industry, albeit one that also benefits millions of homeowners. Mr. Trump has said eliminating the mortgage deduction is off the table.)

Then there is the ability of "active" real estate investors such as Mr. Trump (but virtually no other group) to deduct their real estate losses against other income. That loophole was eliminated for most investors -- including real estate investors -- in the landmark tax legislation in 1986. But because of aggressive lobbying by the powerful real estate industry, including Mr. Trump himself, Congress passed legislation in 1993 restoring the tax break for so-called active real estate developers.

... Another loophole for real estate developers is the so-called like-kind exchange provision, which allows real estate investors to defer or even eliminate capital gains tax by using the proceeds from a sale to reinvest in a similar property (which does not have to be all that similar -- just about any real estate can be exchanged, even an apartment complex for vacant land).

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iehi-feed-62126 Sun, 23 Apr 2017 20:17:33 GMT Telling the truth: The looming pension-pocalypse http://implode-explode.com/viewnews/2017-04-23_TellingthetruthTheloomingpensionpocalypse.html iehi-feed-62125 Sun, 23 Apr 2017 20:06:10 GMT Outsiders "Storm Bastille" in France: Macron and Le Pen Take Lead (Respectively); Will Face-Off http://implode-explode.com/viewnews/2017-04-23_OutsidersStormBastilleinFranceMacronandLePenTakeLeadRespectively.html The storming of the Bastille in 1789 sets the bar high. As a result, few phrases should be used with more circumspection than "French revolution". But the result of the first round of France's 2017 presidential election is an epochal political upheaval for France all the same. For the first time in the nearly 60-year history of the Fifth Republic the second-round contest on 7 May will be between two outsider candidates, Emmanuel Macron and Marine Le Pen. Neither of the candidates of the established parties of left and right will be in the runoff. Whichever of the second-round candidates emerges as the winner in two weeks' time, France is set upon a new political course, with major implications for itself and for the rest of Europe.

The defeat of the established parties is a humiliation for modern French party politics of left and right. The Socialist candidate Benoît Hamon, representing the party of the outgoing president François Hollande, received a mere 6.2% of the votes, according to early estimates. The conservative candidate François Fillon, carrier of the tarnished Gaullist baton, did better, with 19.7%. Yet this is the first time that an official centre-right candidate has failed to get into the second round since General de Gaulle created modern France in 1958. Given the scandals about his use of public funds, it was remarkable that Mr Fillon did so well. Even so, between them Mr Hamon and Mr Fillon took only a quarter of the votes. Instead three French voters out of four, in a turnout of 78%, voted for change.

Le Pen is projected to have pulled 21.9%, and Macron 23.7%, making him the favorite. However, anything can happen as the remaining votes (a majority) are re-allocated... and a lot can happen between now and May 7th.

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iehi-feed-62124 Sun, 23 Apr 2017 15:06:17 GMT Michigan Taxpayers To Get Slapped With An $8.2+ Billion Stealth Tax Increase http://implode-explode.com/viewnews/2017-04-23_MichiganTaxpayersToGetSlappedWithAn82BillionStealthTaxIncrease.html iehi-feed-62123 Sun, 23 Apr 2017 13:37:38 GMT Doug Noland: Liquidity Supernova and the Big Ugly Flaw http://implode-explode.com/viewnews/2017-04-23_DougNolandLiquiditySupernovaandtheBigUglyFlaw.html