Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-61524 Fri, 20 Jan 2017 15:18:51 GMT Freshman congressman with guts is ready to file articles of impeachment against Trump http://implode-explode.com/viewnews/2017-01-20_Freshmancongressmanwithgutsisreadytofilearticlesofimpeachmentaga.html iehi-feed-61521 Thu, 19 Jan 2017 23:38:50 GMT Dimon: Euro Zone May Not Survive If Economic Concerns Are Ignored http://implode-explode.com/viewnews/2017-01-19_DimonEuroZoneMayNotSurviveIfEconomicConcernsAreIgnored.html Dimon said he had hoped European Union leaders would examine what caused the U.K. to vote to leave and then make changes. That hasn't happened, and if nationalist politicians including France's Marine Le Pen rise to power in elections across the region "the euro zone may not survive," Dimon, 60, said in a Bloomberg Television interview with John Micklethwait.

"What went wrong is going wrong for everybody, not just going wrong for Britain, but in some ways it looks like they're kind of doubling down," Dimon said in the interview Wednesday at the annual meeting of the World Economic Forum in Davos, Switzerland. Unless leaders address underlying concerns, "you're going to have the same political things about immigration, the laws of the country, how much power goes to Brussels."

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iehi-feed-61520 Thu, 19 Jan 2017 23:26:32 GMT How Deutsche Bank Made a $462 Million Loss Disappear (Monte Pasci) http://implode-explode.com/viewnews/2017-01-19_HowDeutscheBankMadea462MillionLossDisappearMontePasci.html iehi-feed-61519 Thu, 19 Jan 2017 23:01:58 GMT Western Union Slapped With $586M Fine For Abetting Systemic Fraud http://implode-explode.com/viewnews/2017-01-19_WesternUnionSlappedWith586MFineForAbettingSystemicFraud.html Western Union Co, the world's biggest money-transfer company, agreed to pay $586 million and admitted to turning a blind eye as criminals used its service for money laundering and fraud, U.S. authorities said on Thursday.

Western Union, which has over half a million locations in more than 200 countries, admitted "to aiding and abetting wire fraud" by allowing scammers to process transactions, even when the company realized its agents were helping scammers avoid detection, the U.S. Department of Justice and the Federal Trade Commission said in statements.

With the help of Western Union agents, Chinese immigrants used the service to send hundreds of millions of dollars to pay human smugglers, wiring the money in smaller increments to avoid federal reporting requirements, U.S. authorities said.''

Meanwhile, governments don't want YOU to have access to cash or day-to-day use of virtual currencies like bitcoin, because ... well, something like what Western Union (and the big banks) have been doing MIGHT happen...

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iehi-feed-61517 Thu, 19 Jan 2017 04:21:33 GMT Janet Yellen: Economy is getting closer to "running on its own" http://implode-explode.com/viewnews/2017-01-18_JanetYellenEconomyisgettingclosertorunningonitsown.html [Yellen] said the long-run unemployment rate is probably 4.75 percent, just above the current 4.7 percent. Inflation is "inching back" toward the Fed's 2 percent goal, which has remained elusive even as the economy has stayed out of recession for nearly eight years and unemployment is at its lowest level since late 2007.

Despite the economic improvements, the Fed has remained cautious. "Right now our foot is still pressing on the gas pedal, though, as I noted, we have eased back a bit," Yellen said.

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The funds rate, which banks charge to lend to each other overnight, likely will be at 3 percent by the end of 2019, a target that Yellen acknowledged is "a full percentage point lower than our estimate just three years ago."

The Fed looks set to undershoot -- as they almost always do in rate-rise cycles. This is probably a major reason that gold usually rallies hard after rate hikes begin -- because it's too little, too late.

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iehi-feed-61516 Wed, 18 Jan 2017 23:30:34 GMT House Plan For Trump-ish "Border Adjustable Tax" Will Likely Hit WTO Wall http://implode-explode.com/viewnews/2017-01-18_HousePlanForTrumpishBorderAdjustableTaxWillLikelyHitWTOWall.html iehi-feed-61515 Wed, 18 Jan 2017 22:54:44 GMT The Dollar, "the Most Crowded Trade," Gets Less Crowded http://implode-explode.com/viewnews/2017-01-18_TheDollartheMostCrowdedTradeGetsLessCrowded.html iehi-feed-61514 Wed, 18 Jan 2017 21:45:44 GMT Troubled Deutsche Bank Scraps Senior Bankers' Bonuses for 2016 http://implode-explode.com/viewnews/2017-01-18_TroubledDeutscheBankScrapsSeniorBankersBonusesfor2016.html Deutsche Bank AG scrapped the bonuses of its top executives for a second straight year and slashed variable compensation for other senior employees, as Germany's largest lender tries to shore up capital that's been eroded by low interest rates and legal expenses.

The measures, announced in a memo to employees Wednesday that was signed by the members of the management board, will affect about a quarter of employees, including vice presidents, directors and managing directors. A "limited number" of employees in crucial positions will receive a special long-term incentive, partly in stock, that will be deferred for as long as six years, according to the memo.

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"Now that we have a clearer idea of the financial impact of the settlement with the U.S. Department of Justice and our performance for the year, we feel that tough measures are unavoidable," the bank said in the memo. "This is especially true at a time when thousands of jobs are being cut and our shareholders are not receiving an annual dividend."

The widespread bonus cuts, unprecedented in the bank's recent history, highlight the severity of its troubles, and come as fixed-income traders around the world are about to see their annual pay grow for the first time since 2012 amid a surge in bond trading, according to a November report from recruitment firm Options Group Inc.

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iehi-feed-61512 Wed, 18 Jan 2017 21:29:46 GMT China Housing Bubble Finally Pops: First Slowdown After 19 Months Of Acceleration http://implode-explode.com/viewnews/2017-01-18_ChinaHousingBubbleFinallyPopsFirstSlowdownAfter19MonthsOfAcceler.html iehi-feed-61511 Wed, 18 Jan 2017 19:42:51 GMT Monsanto-Bayer: Trump noses into one of the world's biggest mergers (AND FINDS COMPLEX JOB/COMPETITION CALCULUS) http://implode-explode.com/viewnews/2017-01-18_MonsantoBayerTrumpnosesintooneoftheworldsbiggestmergersANDFINDSC.html Trump asked specific questions about the $66 billion merger they are in the middle of, according to people briefed on the meeting. The companies committed to $8 billion in new research and development, along with 3,000 new jobs and a commitment to keep 9,000 other jobs in the United States, if the merger goes through.

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[But] Leading the charge [against the deal] on Capitol Hill is Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa), who has pushed regulators to block the deal.

"I am concerned that the merger will curtail chemical and seed choices, and raise prices for farmers and the American consumer. In addition, I am concerned that the proposed deal will harm research, development and innovation," the Iowa Republican said in a Nov. 2 letter to the Justice Department's antitrust division.

Among those advocating against consolidation in the agrochemical industry is Bruce Rastetter, an Iowa agribusiness leader and Republican mega-donor, who also serves on Trump's agricultural advisory council. Rastetter says the deals would limit competition, raise costs for farmers and stunt job growth.

"It's not surprising that the people who will benefit most from the merger are anxious to convince President-elect Trump that it won't harm farmers and agriculture," Rastetter said in a recent interview with POLITICO. "Trump is smart enough to know that when fewer companies are selling products, there is less competition and prices go up."

Painter said that Trump, if he wants to set economic policies, should propose laws across the board and not get involved in the specifics of deals with companies.

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iehi-feed-61510 Wed, 18 Jan 2017 19:38:18 GMT Walmart touts boosting U.S. job count by 10,000 http://implode-explode.com/viewnews/2017-01-18_WalmarttoutsboostingUSjobcountby10000.html Retail giant Walmart said Tuesday that it will create 10,000 new retail jobs in the U.S. this year, the latest American company to promote its domestic-focused hiring and investment ahead of Friday's transfer of power from President Obama to President-elect Donald Trump.

The new Walmart hires will work at soon-to-be-opened stores, expanded existing stores and e-commerce services, the company said Tuesday. In addition, Walmart said an estimated 24,000 construction jobs will support its plans to open new stores and remodel existing ones.

This is a bit hollow coming from WalMart, which has pretty clearly reduced the overall job count (by a lot). You can argue that this is "creative destruction" (even though WalMart is basically the largest conduit of cheap foreign-made consumer products into the US), but at a minimum, counting WalMart-created jobs as if they are leading to net job creation is a total farce.

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iehi-feed-61509 Tue, 17 Jan 2017 23:04:55 GMT Gundlach's Projections: Stocks Will Correct; Euro Will Deteriorate http://implode-explode.com/viewnews/2017-01-17_GundlachsProjectionsStocksWillCorrectEuroWillDeteriorate.html iehi-feed-61508 Tue, 17 Jan 2017 22:36:28 GMT Survey Says: Americans Already Hate Their Incoming "Populist" President http://implode-explode.com/viewnews/2017-01-17_SurveySaysAmericansAlreadyHateTheirIncomingPopulistPresident.html The CNN/ORC poll shows 53 percent of Americans view Trump unfavorably, while only 44 percent have a favorable opinion of the incoming president. In the ABC News/Washington Post poll, Trump's favorable rating is just 40 percent, with 54 percent having an unfavorable opinion.

That, according to The Washington Post, makes Trump the least-popular incoming president of the past 40 years -- by a large margin. Eight years ago, ABC News/Washington Post polling showed Barack Obama with a 79 percent favorable rating. Even George W. Bush -- who lost the popular vote and was designated the next president only after a protracted recount in Florida -- had a 62 percent favorable rating on the eve of his inauguration. Bush's 36 percent unfavorable rating was the lowest of the modern era, until Trump's 54 percent score in the new poll.

This is only surprising to those that are in denial of the popular vote outcome (and let's not forget the vast pool of people who didn't vote at all or voted for neither major candidate, who are especially at liberty to start grousing); but we have to wonder if Trumps insular handling of staffing his administration and conducting his naescent policy (much more actively than for a typical president-elect) are already alienating additional people.

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iehi-feed-61507 Tue, 17 Jan 2017 22:03:37 GMT Why the Price of Gold Will Rise 15.2% This Year http://implode-explode.com/viewnews/2017-01-17_WhythePriceofGoldWillRise152ThisYear.html iehi-feed-61504 Tue, 17 Jan 2017 19:58:25 GMT Bombshell as Trump just signaled the death of Clinton-era strong "dollar policy" http://implode-explode.com/viewnews/2017-01-17_BombshellasTrumpjustsignaledthedeathofClintonerastrongdollarpoli.html Presidents in recent history have refrained from talking the currency up or down, and Chandler says going back to Clinton Treasury Secretary Robert Rubin, the policy has been for a strong dollar. Even when the dollar's strength created headwinds, administrations have stood by it, at least verbally.

Trump said the dollar was already "too strong," and he pointed a finger at the Chinese currency. "Our companies can't compete with them now because our currency is too strong. And it's killing us," he told the newspaper. Trump said the yuan has been "dropping like a rock," and that recent Chinese moves to support its currency were done "because they don't want us to get angry."

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"It raises questions. Are we back to Lloyd Benson? He talked the dollar down and the dollar collapsed. Is this a jettison of the Rubin strong dollar policy? We don't know," said Chandler.

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Woo said he does not expect Mnuchin to tout the strong dollar policy. Instead, he expects him to stop short of it as he did in a recent CNBC interview by more or less saying a strong "economy" is in the best interest of the U.S. That is very like the comment made by Lew on Tuesday.

This is one of the simplest, most effective things Trump can do (as it addresses the all-important monetary front of U.S. economic challenges, and apparently, is all Trump cares to do on that front) -- of course, there is a risk of it overshooting badly. The real bold move would be to re-back the dollar with gold when it is at its nadir, but that would take "work" to setup, not just gum-flapping/twitter tapping.

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iehi-feed-61503 Tue, 17 Jan 2017 19:54:55 GMT GM to invest $1 billion in U.S. [APPEASING, BUT PROBABLY NOT DUE TO] Trump http://implode-explode.com/viewnews/2017-01-17_GMtoinvest1billioninUSAPPEASINGBUTPROBABLYNOTDUETOTrump.html The automaker also said it plans to bring thousands of information technology jobs back to the U.S. from overseas, creating a total of 7,000 new jobs in the U.S. when the IT jobs and new manufacturing jobs are combined.

The company simultaneously said the investments had been in the planning stages for some time -- denying it was in response to pressure from Trump -- while also saying "this was good timing" to make the announcement.

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GM said it has been shrinking its presence outside of the U.S. in recent years as it has strived to improve efficiency and has moved more efficient. On Tuesday, GM said it plans to insource more than 6,000 IT jobs that were formerly outside the U.S. -- a move that will create more than 5,000 new jobs in the U.S. over the next few years.

GM employs 56,000 hourly workers in the U.S., up from 51,000 at the end of 2009 after it emerged from bankruptcy.

As we have pointed out around here for a few years, the benefits of offshoring jobs from the US likely "peaked" a few years ago, because of rising costs overseas as well as other factors (e.g., with increased automation, the cost of each employee doesn't matter as much).

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iehi-feed-61502 Tue, 17 Jan 2017 18:58:36 GMT Theresa May Elaborates on Brexit: 4 Quotes and What They Mean http://implode-explode.com/viewnews/2017-01-17_TheresaMayElaboratesonBrexit4QuotesandWhatTheyMean.html "I must be clear. Britain wants to remain a good friend and neighbor to Europe. Yet, I know there are some voices calling for a punitive deal that punishes Britain and discourages other countries from taking the same path. That would be an act of calamitous self-harm for the countries of Europe. And it would not be the act of a friend. Britain would not -- indeed, we could not -- accept such an approach."

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Since the referendum, Britain's European partners have taken a hard line, warning that it cannot have an à la carte membership in which it cherry-picks the benefits it wants to retain. Some European leaders have also said that Britain should be punished in some way to deter other countries from trying to leave the European Union.

In her speech, Mrs. May emphasized Britain's friendship with Europe and said that the nation did not seek to unravel the union. But those comments were quickly followed by the threat that punitive measures against Britain could easily backfire. Case in point: This week, Philip Hammond, the chancellor of the Exchequer, suggested that Britain could transform itself into a corporate tax haven if the European Union failed to strike a trade agreement with the country.

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iehi-feed-61500 Tue, 17 Jan 2017 18:36:29 GMT China's Xi Jinping Seizes Role as http://implode-explode.com/viewnews/2017-01-17_ChinasXiJinpingSeizesRoleas.html “No one will emerge as a winner in a trade war,” Mr. Xi, the leader of the world’s second-biggest economy, said in hourlong speech on Tuesday to members of the world elite gathered for the annual World Economic Forum. “Pursuing protectionism is just like locking one’s self in a dark room. Wind and rain may be kept outside, but so are light and air.”

The Chinese leader’s message comes as the U.S. prepares to inaugurate President-elect Donald Trump, a vociferous skeptic of trade who has vowed to put America first.

Mr. Xi sought to portray Beijing as a benevolent power intent on upholding an international order that has boosted common prosperity. He exhorted world leaders to “join hands and rise to the challenge.”.... “There is a vacuum in global leadership. Xi sees it and he seizes it,” said Carl Bildt, a former prime minister of Sweden, who was in the audience. “If the U.S. does take a more mercantilist route, overall the Asians and Europeans will have to combine to preserve global free trade.”''

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In many ways, Mr. Xi—and his government—are deeply ambivalent about globalization. Mr. Xi is an unabashed nationalist, who resents the West’s lecturing on human rights and democracy. He has sought to bulk up state-run companies and kept China’s internet isolated behind its Great Fire Wall.

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Mr. Xi stressed that no power should attempt to dictate to other countries a specific path. Development, he said, is “of the people, by the people, and for the people,” borrowing a phrase from U.S. President Abraham Lincoln’s Gettysburg Address.

Some in the audience noted irony in the appeal from the leader of a country that has undermined competition.

Foreign companies and governments complain that China has moved to restrict foreign companies’ access to its markets, while buying up technology and assets from firms abroad. The U.S. and Europe also accuse China of selling goods from steel to solar panels at improperly low prices.

The article's thrust is right -- if Xi is really going to seize a role as "leader of globalization", beyond just rhetoric, Beijing's conduct will have to change meaningfully. China's participation in globalization in the past decade+ has been hugely lop-sided, and that's a major reason for the backlash now.

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iehi-feed-61498 Tue, 17 Jan 2017 01:59:07 GMT Davos elite faces evaporating trust of populace http://implode-explode.com/viewnews/2017-01-16_Davoselitefacesevaporatingtrustofpopulace.html Trust in governments, companies and the media plunged last year as ballots from the United States to Britain to the Philippines rocked political establishments and scandals hit business.

The majority of people now believe the economic and political system is failing them, according to the annual Edelman Trust Barometer, released on Monday ahead of the Jan. 17-20 World Economic Forum (WEF).

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"The most shocking statistic of this whole study is that half the people who are high-income, college-educated and well-informed also believe the system doesn't work."

We're not sure what's "post-truth" about no longer having trust in elites; so we just went ahead and cropped that from the headline.

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iehi-feed-61497 Tue, 17 Jan 2017 01:57:30 GMT Despite Electoral Win, Trump Lacks Popular Mandate on Key Policy Planks, Including Health and Taxes http://implode-explode.com/viewnews/2017-01-16_DespiteElectoralWinTrumpLacksPopularMandateonKeyPolicyPlanksIncl.html On other issues, a similar story presents itself. Public Policy Polling (PPP) has found that the vast majority (88 percent) of voters in Florida, Nevada, Ohio, Pennsylvania and Wisconsin -- four crucial swing states, three of which went to Trump this fall -- oppose cutting Social Security benefits, while a majority (68 percent) oppose privatizing Social Security. Similarly, 67 percent of Americans support requiring high-income earners to pay the payroll tax for all of their income (the cap is currently $118,500), according to a Gallup poll. America's two other major social programs, Medicare and Medicaid, are also widely supported by Americans, and the vast majority oppose any spending cuts to either. In fact, more Americans support cutting the national defense budget than Medicare or Medicaid.

It goes on and on. A majority of Americans, 61 percent, believe that upper-income earners pay too little in taxes. A majority of 64 percent believe that corporations don't pay their fair share in taxes. Significant majorities believe that wealth distribution is unfair in America, support raising the minimum wage (though perhaps not as high as Sanders would like), and say they are worried about climate change.

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