Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-65294 Wed, 08 Apr 2020 22:30:07 GMT Amid Divisions, European Finance Ministers Fail To Reach Coronavirus Support Deal http://implode-explode.com/viewnews/2020-04-08_AmidDivisionsEuropeanFinanceMinistersFailToReachCoronavirusSuppo.html The France 24 news channel reported that the two camps sparred over the terms and conditions attached to eurozone credit for governments. At issue is the Italian demand that loans be free of any requirement for fiscal reform, and the Netherlands' refusal to countenance that.

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Much of the acrimony surrounding the EU's north-south divide dates from the European debt crisis, which began nearly a decade ago, when strict austerity measures were imposed on many of the continent's southern countries

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Closed borders, travel restrictions and the shutdown of restaurants and bars have been implemented across most of Europe in an attempt to combat the spread of the coronavirus. The impact of these measures is more severely felt in the southern countries, where tourism accounts for a higher share of nations' gross domestic product.

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iehi-feed-65278 Fri, 03 Apr 2020 15:29:11 GMT The missing six weeks: how Trump failed the biggest test of his life http://implode-explode.com/viewnews/2020-04-03_ThemissingsixweekshowTrumpfailedthebiggesttestofhislife.html Disbanding the [pandemic response unit of the national security council] exacerbated a trend that was already prevalent after two years of Trump -- an exodus of skilled and experienced officials who knew what they were doing. "There's been an erosion of expertise, of competent leadership, at important levels of government," a former senior government official told the Guardian.

"Over time there was a lot of paranoia and people left and they had a hard time attracting good replacements," the official said. "Nobody wanted to work there."

It was hardly a morale-boosting gesture when Trump proposed a 16% cut in CDC funding on 10 February -- 11 days after the World Health Organization had declared a public health emergency over Covid-19.

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Konyndyk recalls attending a meeting in mid-February with top Trump administration officials present in which the only topic of conversation was the travel bans. That's when he began to despair about the federal handling of the crisis.

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So it has transpired. In the wake of the testing disaster has come the personal protective equipment (PPE) disaster, the hospital bed disaster, and now the ventilator disaster.

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Early on in the crisis, Griffeth said, it dawned on her and many of her peers that the federal government to which they would normally look to keep them safe was nowhere to be seen. They resigned themselves to a terrible new reality.

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But just in the last few days, Griffeth has started to see the emergence of something else. She has witnessed an explosion of Americans doing it for themselves, filling in the holes left by Trump's failed leadership.

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iehi-feed-65270 Tue, 31 Mar 2020 21:23:35 GMT Coronageddon: Job losses could total 47 million, unemployment rate of 32%, Fed says http://implode-explode.com/viewnews/2020-03-31_CoronageddonJoblossescouldtotal47millionunemploymentrateof32Feds.html The projections are even worse than St. Louis Fed President James Bullard's much-publicized estimate of 30%. They reflect the high nature of at-risk jobs that ultimately could be lost to a government-induced economic freeze aimed at halting the coronavirus spread.

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A record 3.3 million Americans filed initial jobless claims for the week ended March 21. Economists surveyed by Dow Jones expect another 2.65 million to join them this week.

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The central part of Faria-e-Castro's compilations comes from previous Fed research showing 66.8 million workers in "occupations with high risk of layoff." They are sales, production, food preparation and services. Other research also identified 27.3 million people working in "high contact-intensive" jobs such as barbers and stylists, airline attendants, and food and beverage service.

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That would bring the U.S. unemployment rolls to 52.8 million, or more than three times worse than the peak of the Great Recession. The 30% unemployment rate would top the Great Depression peak of 24.9%.

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iehi-feed-65248 Sat, 21 Mar 2020 21:15:05 GMT Covid-19 Divides U.S. Society by Race, Class and Age http://implode-explode.com/viewnews/2020-03-21_Covid19DividesUSSocietybyRaceClassandAge.html iehi-feed-65229 Mon, 16 Mar 2020 15:43:47 GMT Fed is ‘throwing money in the wrong place,' says Sheila Bair, former top banking regulator http://implode-explode.com/viewnews/2020-03-16_FedisthrowingmoneyinthewrongplacesaysSheilaBairformertopbankingr.html ``"Lowering interest rates to zero doesn't help if businesses can't pay their loans back and they don't have cash flow," she said. "We need to get help out there, especially to small businesses and people already losing their jobs."

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While preventing the implosion of big banks and the American auto industry were an immediate focus of rescue programs more than a decade ago, relief was less comprehensive and slower to reach U.S. households, which the Brookings Institution estimates led to the loss of 8.7 million jobs, more than 8 million home foreclosures and the shuttering of more than 500 community banks.

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"Forget this 2008 financial crisis playbook," Bair said. "We never focused enough on the real problem in 2008, which was homeowners," she said, adding that she "loves the idea" of recent proposals that aim to get cash straight into the hands of households who are grappling with shuttered schools, businesses and more.

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Specifically, the Fed can invoke section 13-3 of the Federal Reserve Act, she said, which covers emergency lending programs, and was revised under the 2010 Dodd-Frank Act to make sure that the government targets relief toward industries, not individual companies, threatened by collapse.

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iehi-feed-65228 Mon, 16 Mar 2020 00:38:48 GMT Federal reserve cuts target interest rate to zero to support economy during coronavirus pandemic http://implode-explode.com/viewnews/2020-03-15_Federalreservecutstargetinterestratetozerotosupporteconomyduring.html In a bold, emergency action to support the economy during the coronavirus pandemic, the Federal Reserve on Sunday announced it would cut its target interest rate near zero.

The swifter-than-expected rate cut is designed to prevent the kind of credit crunch and financial market disruptions that occurred the last time the Fed had to cut rates all the way to the bottom: The Fed last cut rates to zero during the global financial crisis just over a decade ago.

In addition to rate cuts, the Fed also said it would purchase another $700 billion worth of Treasury bonds and mortgage-backed securities. It also struck a deal with five other foreign central banks, the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank, to lower their rates on currency swaps to keep the financial markets functioning normally.

The Fed last lowered currency swaps during the European debt crisis in 2011.

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iehi-feed-65226 Fri, 13 Mar 2020 19:34:25 GMT The Trump Presidency Is Over http://implode-explode.com/viewnews/2020-03-13_TheTrumpPresidencyIsOver.html It has taken a good deal longer than it should have, but Americans have now seen the con man behind the curtain. The president, enraged for having been unmasked, will become more desperate, more embittered, more unhinged. He knows nothing will be the same. His administration may stagger on, but it will be only a hollow shell. The Trump presidency is over.

... in some respects, the avalanche of false information from the president has been most alarming of all. It's been one rock slide after another, the likes of which we have never seen. Day after day after day he brazenly denied reality, in an effort to blunt the economic and political harm he faced. But Trump is in the process of discovering that he can't spin or tweet his way out of a pandemic. There is no one who can do to the coronavirus what Attorney General William Barr did to the Mueller report: lie about it and get away with it.

The president's misinformation and mendacity about the coronavirus are head-snapping. He claimed that it was contained in America when it was actually spreading. He claimed that we had "shut it down" when we had not. He claimed that testing was available when it wasn't. He claimed that the coronavirus will one day disappear "like a miracle"; it won't. He claimed that a vaccine would be available in months; Fauci says it will not be available for a year or more.

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Taken together, this is a massive failure in leadership that stems from a massive defect in character. Trump is such a habitual liar that he is incapable of being honest, even when being honest would serve his interests. He is so impulsive, shortsighted, and undisciplined that he is unable to plan or even think beyond the moment. He is such a divisive and polarizing figure that he long ago lost the ability to unite the nation under any circumstances and for any cause. And he is so narcissistic and unreflective that he is completely incapable of learning from his mistakes. The president's disordered personality makes him as ill-equipped to deal with a crisis as any president has ever been. With few exceptions, what Trump has said is not just useless; it is downright injurious.

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iehi-feed-65225 Thu, 12 Mar 2020 19:59:32 GMT Trump has lost the majority of his stock market gains amid equity rout http://implode-explode.com/viewnews/2020-03-12_Trumphaslostthemajorityofhisstockmarketgainsamidequityrout.html What was once a 61% Dow gain since the election on Feb. 12 has evaporated to far thinner 18.2% rally as the index fell from 29,568 to around 21,654.

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By one measure, the sell-off has erased all of U.S. market cap gains since Election Day 2016, wiping out more than $11 trillion in value in less than one month as measured by the Russell 3000 index, according to Bespoke Investment Group.

On Feb. 19, total U.S. market value was just over $35 trillion, but it's since fallen to $23.8 trillion -- the same as it was on Nov. 8, 2016, according to Bespoke.

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iehi-feed-65213 Sun, 08 Mar 2020 21:23:19 GMT Trump, His Eye on the Border, Overlooked the Coronavirus Threat http://implode-explode.com/viewnews/2020-03-08_TrumpHisEyeontheBorderOverlookedtheCoronavirusThreat.html Pretending we could wall out the virus not only gave the public a false sense of security, it also left the United States unready for the threat it now faces. Robust overseas containment was a defensible first step -- travel restrictions can delay the arrival and spread of an outbreak by a few weeks. Paired with the draconian measures imposed by China, this might have extended the window for strengthening domestic preparedness. But buying time only matters if it is linked to a clear plan for enhancing readiness and a reliable surveillance strategy to signal whether containment is working. Neither of those things happened.

American hospital capacity is lean. The 46,500 beds in intensive care in the United States are mostly occupied. Covid-19, if uncontrolled, might lead to up to 1.9 million I.C.U. admissions, according to projections presented to the American Hospital Association.

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iehi-feed-65211 Thu, 05 Mar 2020 23:22:01 GMT Dow tumbles nearly 1,000 points again, because Wall Street can't figure out coronavirus http://implode-explode.com/viewnews/2020-03-05_Dowtumblesnearly1000pointsagainbecauseWallStreetcantfigureoutcor.html iehi-feed-65207 Tue, 03 Mar 2020 22:43:55 GMT Borrowing From Third-World Kleptocracies, Trump "Buys" Loyal Campaign Apparatchiks With Pardons http://implode-explode.com/viewnews/2020-03-03_BorrowingFromThirdWorldKleptocraciesTrumpBuysLoyalCampaignAppara.html Even a cursory look at the list of Trump's February 19 beneficiaries suggests that his aim was not to right the wrong of prosecutorial overreach, but to send a similar message to his network--to reinforce and perhaps expand it. More than 2 million people are incarcerated across the United States. By a very rough estimate extrapolated from federal numbers (statistics of any kind on this topic are hard to find), well less than 7 percent of them were convicted of corruption or significant white-collar crimes. Yet no fewer than eight of Trump's 11 boons went to perpetrators of this stripe: committers of tax fraud, of orchestrating a giant scheme to cheat Medicare, of multiple violations of securities law while creating a speculative bubble in junk bonds (which crashed in 1989 to widespread devastation) (Milken), or of extorting a children's hospital and trying to sell the Senate seat Barack Obama left vacant when he was elected president (Blagojeveich).

Another tell is that Trump's clemency came not at the end of his time in office, as is sometimes the case with such favors bestowed on cronies and swindlers, but well before that--indeed, ahead of an election in which he is running. The gesture was not a guilty half-secret, but a promise. It was meant to show that the guarantee of impunity for choice members of America's corrupt networks is an ongoing principle.

For this message to be delivered with the utmost clarity, the pardons and commutations had to be seen as the work of Trump himself. They could not result or even appear to result from a formal process carried out by the Department of Justice and the White House, as is normally the case. Pay attention is the point being driven home: The network and its chief are what count, not the government as an impartial institution.

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Blagojevich's case provides other insights into the workings of corrupt systems. As he pointed out, he was not a member of Trump's political party. The kleptocratic networks I have examined weave across the bitter identity divides that pit their victims at one another's throats, weakening opposition. And the crimes that sent the former governor to jail are hallmarks of kleptocracies everywhere: seeking to sell a public office; wielding the power of his own office to extort payments. By commuting Blagojevich's sentence, Trump moved toward destigmatizing such behavior, normalizing it, even.

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iehi-feed-65205 Fri, 28 Feb 2020 14:39:10 GMT Global stock markets have lost $6 trillion in value in six days http://implode-explode.com/viewnews/2020-02-28_Globalstockmarketshavelost6trillioninvalueinsixdays.html iehi-feed-65200 Mon, 24 Feb 2020 22:20:28 GMT Dow sinks 1,000 points as pandemic fears rattle Wall Street http://implode-explode.com/viewnews/2020-02-24_Dowsinks1000pointsaspandemicfearsrattleWallStreet.html iehi-feed-65193 Wed, 19 Feb 2020 22:37:47 GMT Extradition Revelation: Trump Offered Assange Pardon if He Covered Up Russian Hack http://implode-explode.com/viewnews/2020-02-19_ExtraditionRevelationTrumpOfferedAssangePardonifHeCoveredUpRussi.html A lawyer for Julian Assange has claimed in court that President Trump offered to pardon Assange if the WikiLeaks founder agreed to help cover up Russia's involvement in hacking emails from the Democratic National Committee. Assange's lawyers said on Wednesday that former Republican congressman Dana Rohrabacher offered Assange the deal in 2017, a year after emails that damaged Hillary Clinton in the presidential race had been published.

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Assange has argued that he should not be extradited to the U.S. because the American case against him is politically motivated... His lawyers told the court that Trump's alleged offer to pardon Assange proved that this was no ordinary criminal investigation.

Edward Fitzgerald, who was representing Assange in court, said he had evidence that a quid pro quo was put to Assange by Rohrabacher, who was known as Putin's favorite congressman.

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iehi-feed-65182 Fri, 07 Feb 2020 15:34:19 GMT FT Report: $2B of "Middle Eastern" Money Lies in Kushner Bailout With Secretive Behemoth Brookfield http://implode-explode.com/viewnews/2020-02-07_FTReport2BofMiddleEasternMoneyLiesinKushnerBailoutWithSecretiveB.html On a busy stretch of Manhattan's Fifth Avenue a few blocks south of Trump Tower, a decaying skyscraper stands as a rebuke to the $1.8bn deal that Jared Kushner helped his family sign a decade ago, at the age of 26. It was the most expensive New York office purchase in history, and for a time it looked likely to sink the Kushners' business. Steve Roth, the billionaire who co-owned 666 Fifth Avenue, lamented it would "be worth a lot more if it was just dirt".By 2016, Mr Kushner was searching for a way out. Destined for a top job in his father-in-law's White House the following year, he found plenty of people to talk to, but no one who was buying. Discussions with Anbang, the Chinese insurance group, came to a halt some time before its flashy chairman Wu Xiaohui landed in a Chinese jail. The Qatari finance minister Ali Shareef al-Emadi met Mr Kushner's father in 2017, although Charles Kushner has said he took the appointment "out of respect" and stressed there could be no deal.Then, with months to go before $1.2bn of mortgage payments fell due in February 2019, the Kushners won a reprieve -- one that looked nothing like a favour from a foreign state. It was an investment from financial group Brookfield, which leased the building whole, paying nearly a century of rent in advance.

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To unpack the Canadian group's accounts is to discover not so much a company as a giant, triangular jigsaw board that spreads across the world and covers assets worth $500bn. The pieces are hundreds of corporate entities, all locked together by elaborate contracts, which give 40 people at the top the right to rule huge sections of the puzzle almost as if it were their own. Those insiders wield such power that the companies below them could face risks similar to those of "pyramid control companies", according to a draft investor disclosure that Brookfield filed with the Securities and Exchange Commission in 2013. (The final version warned instead of risks "associated with a separation of economic interest from control".)

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The known links between Qatar and Brookfield all converge on the investment group's listed property fund BPY. About one-tenth of the fund's assets are tied up in skyscrapers in Canary Wharf and Manhattan that are co-owned by Qatar, but the connection goes further. Through a sovereign wealth fund, Doha is one of BPY's biggest investors, holding $1.8bn worth of BPY preferred equity. The securities have a debtlike quality, and Qatar can force BAM to buy them back for $1.8bn over the next six years.In theory, Qatar has significant influence over BPY. It is entitled to choose one person to sit on BPY's board, and to receive confidential information that other investors never see. Brookfield says the kingdom has never exercised either of those rights. (The Qatar Investment Authority declined to comment.) Both sides have previously indicated that, when Brookfield was negotiating a $1.3bn lease on 666 Fifth Avenue, a building that Charles Kushner had discussed with the Qataris the previous year, the kingdom was not involved.No matter who made the decision or knew about it, rescuing the Kushners strikes some real estate investors as ill-advised.

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In the public accounts of BPY, the listed property fund that received Qatari investment, 666 Fifth Avenue has already all but disappeared. Last January, BPY lost control of BSREP III, the private vehicle that owns the building, after reducing its stake to $1bn. New investors piled in, each taking a piece of the Kushner tower, and lifting the private fund's firepower to $15bn.That influx of cash has not made the tower's ownership any more transparent. A handful of US pension funds have acknowledged their participation, but few other investors have been identified publicly. Knowledgeable people insist that no Qatari money is involved. Materials reviewed by the FT show that about $3bn of the total comes from sovereign governments, although they do not specify which ones, and $2bn of it from the Middle East, although the document does not say exactly where.

So, despite claims to the contrary, Qatari money was indeed involved in "bootstrapping" the Kushner bailout (based on God knows what geopolitical pressure). Now a bunch of other anonymous investors have taken their place and piled on, but admittedly, as $3 bln from sovereign governments, $2 bln from the Middle East. The potential conflicts of interest with US foreign policy are unknown (and, given recent experiences with the Trump administration, constitute a realistic, if not critical, concern).

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iehi-feed-65171 Thu, 30 Jan 2020 01:15:59 GMT The IRS Decided to Get Tough Against Microsoft. Microsoft Got Tougher http://implode-explode.com/viewnews/2020-01-29_TheIRSDecidedtoGetToughAgainstMicrosoftMicrosoftGotTougher.html Here's how it would work. Microsoft's Puerto Rican subsidiary would produce all the CDs for the American market. Because it was the sole producer, it would buy the exclusive rights to Microsoft's technology. Those licenses would entitle the Puerto Rican company to a share of Microsoft's American profits.

According to Hoory's calculations, the factory subsidiary would send the parent company about $31 billion over 10 years -- and receive almost $70 billion in profits in return over the same period. Instead of being taxed in the U.S., where the rate was 35%, the $39 billion difference between those figures would be taxed in Puerto Rico at a rate near 0%. It was a long-term plan that could continue indefinitely.

It didn't matter that the transaction was fundamentally absurd. Microsoft would never actually sell its most valuable asset to another company, let alone to a little tropical factory. Still, there were rules for constructing and valuing deals like this, and Microsoft and KPMG set out to prove they were following them.

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iehi-feed-65157 Wed, 22 Jan 2020 01:47:36 GMT US-China deal is a disaster, former White House economist says http://implode-explode.com/viewnews/2020-01-21_USChinadealisadisasterformerWhiteHouseeconomistsays.html "While this deal is great in the sense that it has calmed things, additional tariffs aren't going on, aside from that the deal is essentially a disaster. It doesn't address any of the systemic issues," Chad Bown, senior fellow at the Peterson Institute for International Economics, said.

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200 billion in U.S. goods over the next two years, as part of the deal. President Donald Trump, who addressed the Davos forum earlier on Tuesday, said the number of purchases could end up closer to $300 billion.

"These are unrealistic numbers, which puts the whole viability of the deal into question," Bown said, adding that the only way to reach these figures is by diverting trade away from other countries, such as soy beans away from Brazil and fish away from Canada.

Among the additional purchases of U.S. goods, China has committed to buy at least $40 billion worth of American farming products. However, a leading commodities expert at Goldman Sachs casted doubts over whether China will manage to do that. Speaking to CNBC earlier this month Jeff Currie said "there is still a lot of uncertainty about how you would achieve $40 (billion) or potentially even $50 billion of agricultural purchases."

Note that in almost every previous, when Trump announced a big "investment" in the US, it either (a) didn't materialize in anywhere near the scale touted, or (b) was simply re-counting some other investment that was already planned or in-process. Thus, this critique is worrying.

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iehi-feed-65134 Wed, 01 Jan 2020 15:09:57 GMT Iraqis storm embassy, another sign of U.S. failure in Middle East http://implode-explode.com/viewnews/2020-01-01_IraqisstormembassyanothersignofUSfailureinMiddleEast.html Bernie Sanders and Pete Buttigieg have raised the issue because Joe Biden makes much of his foreign policy expertise. But as a senator, he voted for the invasion. Sanders voted against it, and Buttigieg thinks it relevant that Biden "supported the worst foreign policy decision made by the United States in my lifetime."

Mayor Pete is too kind. The Iraq War was the worst foreign policy decision made by the United States in anyone's lifetime. Over time, our leaders have made it even worse. And its effects have billowed like a toxic cloud over the national landscape, where they will foul our politics for years to come.

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iehi-feed-65133 Wed, 01 Jan 2020 14:58:56 GMT Ghosn With The Wind (Instrument?): Ex-Nissan Boss Escapes Detention in Japan in Outlandish Plot http://implode-explode.com/viewnews/2020-01-01_GhosnWithTheWindInstrumentExNissanBossEscapesDetentioninJapaninO.html ``One Lebanese TV channel - MTV - reported that Mr Ghosn had fled his court-approved residence in Tokyo with the assistance of a paramilitary group who were disguised amongst a band of musicians.

It said the band had performed at his house and, shortly after they had finished, the 65-year-old hid himself in a large musical instrument case which was then hurried to a local airport. If this really happened, it may have been a tight squeeze even for Mr Ghosn, whose height is reported at 5ft 6in (167cm).

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The newspaper, which cited a number of unidentified sources, said a team was carefully assembled to carry out the plot. The group reportedly included accomplices in Japan who transported Mr Ghosn from his house and onto a private jet bound for Istanbul. From there, he continued his journey to Beirut where he arrived in the early hours of 30 December.

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iehi-feed-65117 Wed, 18 Dec 2019 23:03:27 GMT It's Boris Johnson's Britain Now http://implode-explode.com/viewnews/2019-12-18_ItsBorisJohnsonsBritainNow.html