Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-64944 Mon, 16 Sep 2019 22:24:18 GMT Donald Trump is a deeply stupid man who routinely gets his ass kicked on the world stage http://implode-explode.com/viewnews/2019-09-16_DonaldTrumpisadeeplystupidmanwhoroutinelygetshisasskickedonthewo.html Trump wanted a trade war with China. Because he thought he could bluster and bully and get his way. But like the rest of the world, China is laughing at Trump, when they're not scratching their heads because Trump is so deeply stupid, and his administration so profoundly incompetent that China doesn't even know with whom to negotiate. But Trump got his trade war. Which he is losing. Because he is a deeply stupid man.

Trump's trade war already has cost 300,000 American jobs. And every time he opens his mouth about China, the American stock markets get spooked. And then after threatening to escalate his trade war, Trump backed down, and now desperately wants to find a way out of yet another crisis that is entirely of his own making. Because he has no idea what he's doing. Because he is a deeply stupid man who routinely gets his ass kicked on the world stage.

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iehi-feed-64938 Fri, 13 Sep 2019 22:35:16 GMT $1 Billion in Suspicious Sackler Family Wire Transfers; Anonymous Corporate Shells and Trusts Discovered http://implode-explode.com/viewnews/2019-09-13_1BillioninSuspiciousSacklerFamilyWireTransfersAnonymousCorporate.html Earlier this week, thousands of municipal governments and nearly two dozen states tentatively reached a settlement with the Sackler family and the company it owns, Purdue Pharma, maker of OxyContin. But the attorneys general of a majority of states, including New York and Massachusetts, are balking at the proposed deal, contending that the Sackler family has siphoned off company profits that should be used to pay for the billions of dollars in damage caused by opioids.

The wire transfers are part of a lawsuit against Purdue and individual Sacklers in New York. Letitia James, now the state's attorney general, had issued subpoenas last month to 33 financial institutions and investment advisers with ties to the Sacklers in an effort to trace the full measure of the family's wealth.

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Forbes has estimated that the family fortune is worth $13 billion, a figure the family has not disputed, but many state attorneys general believe that the family has far more hidden away, as a safeguard against the cascade of litigation.

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In addition to the thousands of lawsuits in state and federal court aimed at Purdue itself, some 26 states have named the Sacklers individually, with more, most recently North Carolina, having announced they are about to pursue family members as well.

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A series of transfers involving Mortimer D.A. Sackler, a former Purdue board member, was highlighted in the filings. In one case, $64 million was transferred in 2009 from a previously unknown trust called Purdue Pharma Trust MDAS, through a Swiss bank account, and then to Mr. Sackler, the filing said.

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In a letter to the court Friday, a lawyer in the attorney general's office, David E. Nachman, wrote: "Already, these records have allowed the state to identify previously unknown shell companies that one of the Sackler defendants used to shift Purdue money through accounts around the world and then conceal it in at least two separate multimillion-dollar real estate investments back here in New York, sanitized (until now) of any readily detectable connections to the Sackler family."

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iehi-feed-64935 Fri, 13 Sep 2019 15:56:05 GMT Gold tallies a back-to-back gain after ECB unleashes basket of easy-money measures; Fed under pressure http://implode-explode.com/viewnews/2019-09-13_GoldtalliesabacktobackgainafterECBunleashesbasketofeasymoneymeas.html Gold futures marked a second consecutive gain Thursday after the European Central Bank cut eurozone interest rates and delivered a batch of measures intended to boost the region's sluggish economy -- bullish moves for bullion. The ECB cut its deposit rate further into negative territory, decreasing it by 10 basis points to negative 0.5%, while also announcing it would restart its monthly bond-buying program as it attempts to juice inflation and European expansion.

"Gold certainly welcomed the ECB stimulus," said Craig Erlam, a senior market analyst at Oanda. "Ultimately, global easing like we're seeing now has been bullish for gold and that's exactly what we're seeing right now."

December gold on Comex gained $4.20 an ounce, or 0.3%, to settle at $1,507.40 an ounce ... Silver for December delivery, meanwhile, added nearly a penny, or 0.04%, at $18.177 an ounce...

"Central banks around the world have been easing, and will continue to do so, and that's why gold has been making such strides higher with only modest corrections along the way," Erlam said in a market update.

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iehi-feed-64930 Thu, 12 Sep 2019 15:11:53 GMT ECB Blinks; Revives QE and Cuts Rates Deeper Below Zero http://implode-explode.com/viewnews/2019-09-12_ECBBlinksRevivesQEandCutsRatesDeeperBelowZero.html The European Central Bank cut interest rates further below zero and revived bond purchases after President Mario Draghi overcame critics of his stimulus policies to make a final run at reflating the euro-area economy.

The ECB reduced the deposit rate to minus 0.5% from minus 0.4%, and said it'll buy debt from Nov. 1 at a pace of 20 billion euros ($22 billion) a month for as long as necessary to hit its inflation goal.

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The ECB changed its guidance on interest rates to say they'll stay at present or lower levels until the outlook for inflation "robustly" converges to its goal of just below 2%. It previously expected borrowing costs to stay unchanged until mid-2020. It also scrapped a 10-basis point rate premium previously attached to its long-term loan program.

The actions prompted U.S. President Donald Trump to tweet that the ECB is "acting quickly" while the Federal Reserve "sits, and sits, and sits." That's in line with his strategy of calling on the Fed to cut rates aggressively. The Fed is likely to lower borrowing costs next week for the second time this year, as central banks around the world ease to combat the spreading weakness.

Apparently no recessions will be allowed. Astounding.

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iehi-feed-64922 Thu, 05 Sep 2019 20:33:47 GMT Dubai Villa Prices Fall to Below Financial Crisis Prices http://implode-explode.com/viewnews/2019-09-05_DubaiVillaPricesFalltoBelowFinancialCrisisPrices.html Dubai house prices plummeted to their lowest levels in over a decade last quarter, according to new data from U.A.E.-based property firm Cavendish Maxwell. The average single-family home price sunk 24% over the past year to AED1.82 million (US$495,500), a level not seen in over 11 years despite a global recession and regional economic meltdowns over the past decade, according to data on website Property Monitor.

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The average house, referred to locally as a villa, is now trading for less than it did during the darkest days of the global financial crisis and subsequent credit crunch, which hit Dubai the hardest in 2010-11. It's also lower than at any point since oil prices crashed in 2015, according Property Monitor, which is powered by Cavendish Maxwell.

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While the Dubai economy remains relatively robust, powered by nearly 8 million foreign expats who live and work in the city, nonstop building has created a glut of housing that's prevented home values from appreciating in more than a decade.

Sprawling master-planned communities dotted with mansions have been hit the hardest.

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iehi-feed-64921 Thu, 05 Sep 2019 20:01:11 GMT Alan Greenspan says negative rates will spread to US; Hat-tips Gold http://implode-explode.com/viewnews/2019-09-05_AlanGreenspansaysnegativerateswillspreadtoUSHattipsGold.html It will not be long before the spread of negative interest rates reaches the U.S., former Federal Reserve Chairman Alan Greenspan said.

"You're seeing it pretty much throughout the world. It's only a matter of time before it's more in the United States," Greenspan told CNBC's "Squawk on the Street" on Wednesday, adding investors should watch the 30-year Treasury yield.

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He added that gold prices have been surging recently because people are looking for "hard" assets they know are going to have value down the road as the population ages. Gold futures are up more than 21% in 2019 and are trading around levels not seen since 2013.

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iehi-feed-64918 Wed, 04 Sep 2019 23:16:05 GMT Boris Johnson fails in pushing through snap election after Brexit delay bill passes http://implode-explode.com/viewnews/2019-09-04_BorisJohnsonfailsinpushingthroughsnapelectionafterBrexitdelaybil.html British Prime Minister Boris Johnson failed in his bid to call a snap general election on Wednesday, after lawmakers wrested control of Parliament this week and voted through a bill that aims to stop a no-deal Brexit.

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The new legislation to stop a no-deal Brexit was passed by a vote of 327-299 earlier Wednesday and could now essentially force the prime minister to ask the EU for another delay for the U.K.'s departure, which has a current deadline of October 31. The EU would have to agree to a delay and the bill would also have to be approved by the largely pro-EU House of Lords later this week.''

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iehi-feed-64913 Wed, 04 Sep 2019 14:36:16 GMT Panic Sweeps Argentine Pampas as Farmers' Old Nemesis Returns http://implode-explode.com/viewnews/2019-09-04_PanicSweepsArgentinePampasasFarmersOldNemesisReturns.html Mauricio Macri, the man who championed the cause of the Argentine farmer, is almost certain to lose his re-election bid in October and will hand back the presidency to the leftist party that tormented the region for years. A primary vote held a few weeks ago made that clear...

Times were tough for growers and ranchers under Cristina Fernandez de Kirchner, Fernandez's running mate who was president between 2007 and 2015, when Macri took over.

She curbed exports, capped domestic prices and demonized farmers, grouping them with what she depicted as a greedy clique of businessmen who imperiled her leftist reforms. Her first term was marred by huge protests over taxes on crop shipments.

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Reumann has taken other steps to safeguard his finances. One is conventional enough. He's trying to lock in prices now with buyers for wheat he put in the ground this past winter.

The other appears more unusual, almost desperate. He's only applying a small dose of fertilizer to the wheat. Whatever grows will grow, he figures, but he's not going to spend more money on a crop that Alberto Fernandez, Macri's rival in the Oct. 27 vote, could force him to sell at deeply discounted prices.

"If Fernandez the populist governs, farmers will produce just to subsist," said Juan Ouwerkerk, president of Alfa, a farmers' cooperative in southern Buenos Aires province, Argentina's bread basket. "It could be a train wreck."''

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iehi-feed-64911 Wed, 04 Sep 2019 14:26:14 GMT US manufacturing contracts for the first time in three years amid China trade war http://implode-explode.com/viewnews/2019-09-04_USmanufacturingcontractsforthefirsttimeinthreeyearsamidChinatrad.html iehi-feed-64908 Wed, 04 Sep 2019 00:10:55 GMT Global Economy is Fracturing Along Deep Faults http://implode-explode.com/viewnews/2019-09-03_GlobalEconomyisFracturingAlongDeepFaults.html What has investors so rattled? There are long-term factors in play, like demographic trends and a slowdown in technological change. But what seems finally to have dawned on the markets is that globalization is no longer supported by the combination of investor-friendly economic policy and congenial politics they have long taken for granted.

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So incoherent is the Trump administration's economic policy that no lesser a figure than Bill Dudley, a former president of the Federal Reserve Bank of New York, has said that America's central bank should treat the prospect of President Trump's re-election as a threat to the United States and the world economy. Mr. Dudley argued that the Federal Reserve chair, Jerome Powell, should refuse to cushion the effects of Mr. Trump's protectionism through further interest rate cuts. If the president's bluster sets off a recession, so be it. At least the Fed would not help usher in a second Trump term.

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Though the West still pays lip service to the cause of "market reform," it has come to depend on Beijing's maintaining its grip. But there's an unavoidable question: What are the political consequences of a growing reliance on Beijing's control over the Chinese economy? The question could be dodged when it was assumed China would converge with the West. Now both parties in Congress pose it in geopolitical terms -- key Democrats have pivoted to viewing China's economic growth as a threat to American security.

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Even if a bloody showdown is avoided, the outlook is disconcerting. Beijing has made clear with its bullying of the management of Cathay Pacific that Hong Kong-based multinationals are no longer exempt from Chinese pressure. Large corporations that chose to locate in Chinese territory and profit from China's growth will be expected to play by the Communist Party's rules.

The prospect of a world economy divided among a sclerotic Europe, a nationalist United States and an authoritarian China is a gloomy one.

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iehi-feed-64902 Wed, 28 Aug 2019 22:13:48 GMT What Trump Secrets Are Hiding Inside Deutsche Bank? http://implode-explode.com/viewnews/2019-08-28_WhatTrumpSecretsAreHidingInsideDeutscheBank.html Deutsche Bank's disclosure on Tuesday that it has tax returns related to President Trump's family or business set off a frenzy of speculation about what those materials might reveal.

But a trove of other data and documents that his longtime lender is sitting on might prove more revelatory to investigators digging into Mr. Trump's finances. That includes records of how Mr. Trump made his money, whom he has partnered with, the terms of his extensive borrowings and what transactions he has engaged in with Russians or other foreign nationals.

For nearly two decades, Deutsche Bank was the only mainstream financial institution consistently willing to do business with Mr. Trump, who had a long record of defaulting on loans. The bank over the years collected reams of his personal and corporate information.

Two congressional committees have subpoenaed Deutsche Bank for a vast array of records related to Mr. Trump -- including any tax returns since 2010. The investigators are hoping the materials will shed light not only on the president's finances but also on any links he has had to foreign governments and whether he or his companies were involved in any illegal activity, such as money laundering for people overseas.

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iehi-feed-64900 Tue, 27 Aug 2019 18:46:57 GMT Iceland's Purple Planes Are Grounded, and With Them, Its Economy http://implode-explode.com/viewnews/2019-08-27_IcelandsPurplePlanesAreGroundedandWithThemItsEconomy.html ... five months after WOW's purple jets ceased flying, Iceland is suffering a pronounced drop in tourists that threatens to push the country into recession.... The downturn completes a cycle not unfamiliar to the 350,000 people who live on this boom-and-bust-prone island. WOW cannily exploited the financial crisis, which made the country a more affordable tourist destination. Then WOW helped turn Iceland's glaciers and waterfalls into the backdrop for countless selfies, bringing millions of visitors and propelling economic growth. Finally, WOW disappeared, sending Iceland back to trouble.

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Mr. Mogensen aimed to turn Reykjavik into a major international air hub, exploiting its position near the top of the globe to transport passengers between North America, Europe and Asia, cutting the time of the traditional routes through London and Dubai. Iceland would be an enticing stopover, if not the final destination.

... now tourism is rolling backward, with the number of international visitors on track to drop by 16 percent this year compared with the year before, and numbers of Americans on pace to plunge by 20 percent.

The sudden shortage of Americans -- widely celebrated as a free-spending people -- is bemoaned by merchants of Viking-themed tourist tchotkes, by whale watching tour operators and by real estate agencies.

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Iceland's unemployment rate spiked to 4.7 percent in May, compared with 2.9 percent in January. At the Reykjavik unemployment office, those out of work are growing resigned to settling for less-desirable jobs.

"It's much harder now," said Ivars Rapa, 48, a Latvian immigrant who recently lost his job at a fish processing factory that furloughed its several hundred workers.

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iehi-feed-64895 Sat, 24 Aug 2019 15:28:44 GMT Startups taking money from bad people like Epstein is a big problem http://implode-explode.com/viewnews/2019-08-24_StartupstakingmoneyfrombadpeoplelikeEpsteinisabigproblem.html Jeffrey Epstein, the disgraced financier who killed himself in jail this month, was also a tech investor. He was supposedly a limited partner in venture-capital funds and an investor in startups.

At least one investor who took his money in 2013, Joi Ito, has come forward. He acknowledged accepting Epstein's money years after the 2008 allegations, including Epstein's guilty plea of soliciting prostitution with a minor, were made public.

"Regrettably, over the years, the Lab has received money through some of the foundations that he controlled. I knew about these gifts and these funds were received with my permission," Ito said in a public apology last week. "I also allowed him to invest in several of my funds which invest in tech startup companies outside of MIT."

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Founders are supposed to conduct due diligence on investors before they accept their money. That means calling up references to see whether they're decent humans. Likewise, investors are supposed to do due diligence both on the founders they want to back and on the limited partners who invest in their funds.

Often, little to no due diligence is happening.

"Is it too much to ask that people do a simple Google search before going into business with someone?" the entrepreneur Om Malik wrote after the Epstein-Ito connection was exposed.

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iehi-feed-64894 Fri, 23 Aug 2019 22:14:38 GMT Negative interest rates are coming and they are downright terrifying http://implode-explode.com/viewnews/2019-08-23_Negativeinterestratesarecomingandtheyaredownrightterrifying.html ... negative rates are being normalized by economists, bankers, and commentators. Worst, I have a funny feeling this will end badly. Negative interest rates have all the hallmarks of serious trouble for the financial markets; an anomaly growing in scale which seemingly came out of nowhere that is under-recognized, poorly understood and dismissed as not consequential. (Flashing red lights here.)

In the U.S. we aren't particularly aware of negative rates because they haven't made their way to our shores ... perhaps yet.

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in Europe, it was postulated that negative rates would never fly in the consumer sphere in terms of banks paying back depositors less than they put in their savings accounts, but that's now changing. Banks in Denmark and Switzerland are now charging customers to hold deposits. And on the flip side, and also in Denmark, mortgages with negative rates are available. That's right, you get a mortgage from the bank, and the bank essentially pays you each month. A three-year adjustable rate mortgage priced at negative .28% there recently.

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What would happen if rates go negative in the U.S.? Who knows. Allianz Chief Economic Adviser Mohamed El-Erian, for one, says he would sound the alarm if treasury yields dip into negative territory. "If we do I'm going to be really worried because negative yields in the U.S., the world's biggest financial market, will break things," he told Yahoo Finance.

... [and] there are some pretty serious negatives, certainly from the standpoint of uncertainty. A recent note by JPMorgan lays out nine unintended consequences; including lower bank profitability, lower credit creation, paradoxically higher rates in some instances (banks need to make up for lower income), reduced liquidity and functionality of credit markets, increased deficits in pension funds, and even exacerbation of wealth and income inequality.

A negative-yielding mortgage -- sounds kind of nice, until you realize that with such a positive-feedback loop for borrowing to buy property, that will tend to blow insane housing bubbles...

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iehi-feed-64891 Fri, 23 Aug 2019 20:20:41 GMT Donald Trump can't just 'hereby order' whatever he wants http://implode-explode.com/viewnews/2019-08-23_DonaldTrumpcantjustherebyorderwhateverhewants.html Donald Trump can't order American business to do anything. There's a reason the business world is known as the "private sector" -- because it's not owned or controlled by the government (aka the "public sector.") We don't have state-run industry (or media). The President of the United States can't "order" privately held business to do, well, much of anything.

Now, that doesn't mean that Trump can't have any influence. Every CEO will be apprised of Trump's tweets -- if they haven't already been -- and some, in an effort to cozy up to Trump or because they agree with him about the threat posed by China, will look for ways to divest in the country.

But that's very different than companies having to look for alternatives to China because the President said so. They, uh, don't.

It's not immediately clear -- to me at least -- if Trump understands that. Throughout his presidency, he has marveled at the total control that authoritarian rulers -- in places like Russia and China -- exert over their countries and publicly wished he had control like that.

Around here, we long have criticized the lopsided economic relationship with China; but simplistic and hasty responses are not the answer.

Also, we should respond to Donald Trump's presidency by enumerating a non-exhaustive list of automatically impeachable offenses, one of which being attempting to issue orders grossly outside of the president's constitutional power.

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iehi-feed-64890 Fri, 23 Aug 2019 18:29:15 GMT Sure, Trump Can Buy Greenland. But Why Does He Think It's Up to Denmark? http://implode-explode.com/viewnews/2019-08-23_SureTrumpCanBuyGreenlandButWhyDoesHeThinkItsUptoDenmark.html iehi-feed-64888 Fri, 23 Aug 2019 14:54:22 GMT China retaliates with tariffs on $75 billion of US goods http://implode-explode.com/viewnews/2019-08-23_Chinaretaliateswithtariffson75billionofUSgoods.html The US-China trade war ratcheted up yet again on Friday, with Beijing unveiling a new round of retaliatory tariffs on about $75 billion worth of US goods.

China will place tariffs of 5% or 10% on US imports starting on September 1st, according to a statement posted by China's Finance Ministry.

The Ministry also announced plans to resume tariffs on US imports of automobiles and automobile parts. The tariffs would be 25% or 5%, and would take effect on December 15th.

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iehi-feed-64882 Tue, 20 Aug 2019 09:20:39 GMT Climate change could rain on Saudi Aramco's IPO parade http://implode-explode.com/viewnews/2019-08-20_ClimatechangecouldrainonSaudiAramcosIPOparade.html "The longer that (the IPO) gets delayed, the less willing the market will be to price it favorably because gradually investors are going to need to ask questions about how valuable those reserves are in a world that is trying to get down to net zero emissions by 2050."

Reuters reported on Aug. 8 that Prince Mohammed was insisting on a $2 trillion valuation even though some bankers and company insiders say the kingdom should trim its target to around $1.5 trillion.

A valuation gap could hinder any share sale. The IPO was previously slated for 2017 or 2018 and, when that deadline slipped, to 2020-2021.

Aramco told Reuters it was ready for a listing and the timing would be decided by the government.

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iehi-feed-64869 Tue, 06 Aug 2019 22:53:08 GMT Today From the "What We All Already Knew" File: Jared Kushner Saw Trump Presidency As Chance to 'Dig Himself Out Of' Debt: Report http://implode-explode.com/viewnews/2019-08-06_TodayFromtheWhatWeAllAlreadyKnewFileJaredKushnerSawTrumpPresiden.html iehi-feed-64868 Tue, 06 Aug 2019 15:18:41 GMT Is a US Recession Coming? Yield Curve Loudest Warning Since 2007 http://implode-explode.com/viewnews/2019-08-06_IsaUSRecessionComingYieldCurveLoudestWarningSince2007.html