Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us 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 iehi-feed-65111 Sun, 15 Dec 2019 20:53:51 GMT Trump's 'big deal with China' isn't big, isn't a deal, and isn't real http://implode-explode.com/viewnews/2019-12-15_TrumpsbigdealwithChinaisntbigisntadealandisntreal.html The agricultural purchases required in the agreement are both vague and clearly far too small to restore even the conditions that existed before Trump's actions sent China looking to South America and other regions to replace goods they would have previously purchased from America. In 2019, farm debt topped $416 billion--absolutely swamping the scale of Trump's "enormous deal," even when including non-agricultural products. 

Even as bankruptcy is up 24% in a single year, Trump is telling America's farmers that it's time to buy "much larger tractors" to generate all the grain required by this deal. Trump says that he expects China to buy $50 billion of U.S. agricultural products. That $50 billion figure is one that Trump has deployed before. It's just that the date keeps shifting. And shifting. That number is imaginary, but the exploding farm debt and bankruptcies are very real.

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In fact, Trump's massively hyped trade deal is such a preliminary step that it's not even getting rid of the tariffs he's put in place. The 25% tariff on over $250 billion of Chinese products is untouched, while the 15% tariff that was placed on another $150 billion in goods is dropping to 7.5%. Or, 7.5% higher than they were in September--which is not a great sign that a trade war has "ended."

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iehi-feed-65108 Sat, 14 Dec 2019 03:52:09 GMT Lofgren: This Is the Third Impeachment I've Worked On. It's by Far the Most Serious http://implode-explode.com/viewnews/2019-12-13_LofgrenThisIstheThirdImpeachmentIveWorkedOnItsbyFartheMostSeriou.html I'll never forget the impact on Representative Chuck Wiggins--one of the most vigorous defenders of President Richard Nixon--when he confronted the fact that Nixon had lied to him. And I'll never forget when my boss at the time explained impeachment to his colleagues by saying how "[our founders] recognized the frightening power that the president has, that we give the president, and the grave danger to the republic should he abuse it."

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I can say with certainty that if a Democratic president did what Trump very clearly appears to have done, I would be over at the White House saying, "You should resign."

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iehi-feed-65104 Thu, 12 Dec 2019 15:21:53 GMT Johnson and Corbyn Are Both Horrible Choices http://implode-explode.com/viewnews/2019-12-12_JohnsonandCorbynAreBothHorribleChoices.html The two candidates are so alarming that, in an unprecedented intervention, former prime ministers from each of their parties have pleaded with voters to block them. Tony Blair and John Major have urged tactical votes against Mr. Corbyn and Mr. Johnson. Everywhere, exhausted, disillusioned, skeptical voters debate who is worse. British politics has never known anything like it.

These very different men share remarkable, unflattering similarities. Each is ill briefed, hazy on the facts and implications of his policy proposals, uneasy under scrutiny and belligerent when challenged.

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Mr. Corbyn may believe, delusional though it is, that he really can restructure British capitalism overnight without damaging the economy. His stubborn moral certainty means he's deceiving himself along with everybody else. Most politicians, of course, have ambitions beyond their competence and dreams they can't deliver.

Mr. Johnson is playing another game entirely. Amoral and power-hungry, he's lying with knowledge, calculation and abandon. He and his advisers have made a ruthless and sinister decision -- to subvert and smash up British political culture. They have learned from the successes of the Vote Leave campaign, which Mr. Johnson fronted, and, it seems, from Team Trump.

The old assumptions -- that truth matters, that lies shame the liar, that in a democracy the press and the public must have a right to interrogate those who seek the top jobs -- have all been swept aside by the Tories' conviction that in an inattentive, dissatisfied, cacophonous world, victory will go to the most compelling entertainer, the most plausible and shameless deceiver, the leader who can drill home a repetitive and seductive incantation. Facts and details will be irrelevant so long as voters feel a politician is on their side.

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iehi-feed-65084 Thu, 21 Nov 2019 23:50:58 GMT The World May Have a Bigger Problem Than a Potential Recession http://implode-explode.com/viewnews/2019-11-21_TheWorldMayHaveaBiggerProblemThanaPotentialRecession.html For OECD Chief Economist Laurence Boone, the worry is that the world could continue to suffer in the decades to come if authorities offer short-term fiscal and monetary fixes as the only response.

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The pessimism about the deep seated problems in the global economy contrasts with more upbeat signals coming from financial markets, where investors are increasingly betting on an upswing next year depending on the latest twists in trade talks.

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iehi-feed-65083 Thu, 21 Nov 2019 22:53:16 GMT Greece's Moria Refugee Camp: A European Failure http://implode-explode.com/viewnews/2019-11-21_GreecesMoriaRefugeeCampAEuropeanFailure.html From up close, Moria is a chaotic mass of humanity. Built to house about 3,000 people, it is now home to more than 13,000 (including an estimated 1,000 unaccompanied minors)--more than it has ever held. They wait, sometimes for more than a year, for the slow wheels of Greek bureaucracy to turn, to review their asylum applications, to send them to the mainland for a decision. Winter is approaching, and many of these 13,000 live outside the camp's walls, in tents pitched on the surrounding hillsides, without electricity or running water, which are provided only inside the camp. NGOs, which lease the land for the tents, help run basic services and report atrocious conditions. Fights break out in the hours-long food lines. Women are afraid to use the toilets for fear of harassment. In September, a woman died in a deadly fire.

How did it come to this? Because Europe allowed it to come to this.

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What is Moria? It is where Europe's ideals--solidarity, human rights, a safe haven for victims of war and violence--dissolve in a tangle of bureaucracy, indifference, and lack of political will. It is the normalization of a humanitarian crisis. It is the moral failure of Europe.

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iehi-feed-65079 Tue, 19 Nov 2019 01:38:51 GMT Inside the doomed relationship of Masa Son and Adam Neumann http://implode-explode.com/viewnews/2019-11-18_InsidethedoomedrelationshipofMasaSonandAdamNeumann.html ``... there was a third man in the mix, Mohammad bin Salman, the crown prince of Saudi Arabia. Bin Salman was Son's biggest investor. Two years earlier, he'd put in nearly half the capital, $45 billion, to launch Son's $100 billion Vision Fund, a brash and controversial investment vehicle fueling the world's biggest startups, including WeWork, Uber, DoorDash, and ByteDance. In October, the prince would say publicly that he intended to put up another $45 billion. He was also expecting Son in Riyadh later in the month, at a Saudi financial conference known as Davos in the Desert. Neumann was invited, too, even though, as an Israeli citizen, he wasn't officially allowed in the Islamic country.

Then news broke on October 3 that Washington Post columnist Jamal Khashoggi had vanished inside the Saudi consulate in Istanbul. Almost immediately, bin Salman was implicated. As gruesome details emerged--a bone saw, body parts removed in suitcases--it didn't take long for investors or the general public to take issue with SoftBank's connection to the Saudi money. The company's stock plummeted 20%, losing some $20 billion in value.

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It was during this time, as pressures on SoftBank's stock price and Son's biggest backer mounted, that Son began to rethink his offer to Neumann. The pair had been arguing over who would ultimately control WeWork when the deal was done. On Christmas Eve, Son called Neumann to break the news that the deal they'd planned was off. Neumann was stunned and upset, and still desperate for cash. He managed to negotiate a revised $2 billion deal. Still feeling pressure for more capital, Neumann made another fateful move. On December 28, 2018, he filed confidential documents registering WeWork for an initial public offering.

Neither man knew it at that moment, but the move started a death clock ticking.

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iehi-feed-65077 Fri, 15 Nov 2019 14:38:21 GMT ‘Chile Woke Up': Legacy of Inequality Triggers Mass Protests http://implode-explode.com/viewnews/2019-11-15_ChileWokeUpLegacyofInequalityTriggersMassProtests.html The end of the Pinochet dictatorship, in 1990, came with an implicit caveat: Military rule would end, but the socialist policies of Salvador Allende, the leftist president Gen. Augusto Pinochet had deposed in a coup, would not return. Subsequent governments preserved the extreme laissez-faire economic system imposed in the 1970s and 1980s.

But today, widespread public anger over the inequality and economic precarity that many Chileans see as a consequence of that system means that conservative economic policies may be more of a threat to political stability than a means of ensuring it.

... [But] the Chilean political crisis is not unique to Chile. It carries unmistakable echoes of a problem that is at the center of political conflict all over the developed world.

As free trade, new technologies, the rise of China, and other seismic changes have reshaped the world's economies, political divisions have emerged between those who gain from the current system and those who do not.

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In much of Europe and the United States, onetime industrial towns declined as economic growth accrued to large, globally connected cities, instead. For many, even those who have seen modest objective improvements in their own standards of living, watching others surge ahead while they struggle has left them feeling angry and disillusioned. In many countries, trust in institutions is falling, surveys show.

The same economic changes have shattered longstanding political coalitions, weakening mainstream parties. Far-right populists and other outsider politicians have moved to fill the vacuum left behind.

And with no effective channels for public anger, mass frustration has erupted into protest movements like France's Yellow Vests and the demonstrations in Chile.''

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iehi-feed-65061 Tue, 05 Nov 2019 19:00:06 GMT Worst May Be Over for Global Economy Amid Signs of Stabilization http://implode-explode.com/viewnews/2019-11-05_WorstMayBeOverforGlobalEconomyAmidSignsofStabilization.html One key reason for the potential turn is the wave of interest-rate cuts from global central banks. Of the 57 institutions monitored by Bloomberg, more than half cut borrowing costs this year with the Fed doing so three times and the European Central Bank pushing its deposit rate further into negative territory. Rate cuts also operate with a lag so the positive effects of easier monetary policy have yet to fully flow through, meaning a further impulse likely awaits.

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Also driving sentiment is that President Donald Trump and President Xi Jinping are on the cusp of signing "phase one" on a trade deal, which could be enough for global commerce to find a footing. China is reviewing locations in the U.S. where Xi would be willing to meet with Trump to sign a pact.

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"If the U.S.-Chinese trade escalates again, or if the U.S. starts a new trade war against the only other economy of almost equal size, the EU, it could all still go wrong," said Holger Schmieding, chief economist at Berenberg Bank. "But in the absence of such new political shocks, chances are that the global downturn could peter out in early 2020 and make way for a modest upturn thereafter."

Back on the "no recession ever" yellow brick road... all it takes is financial meltdown-level central bank intervention...

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iehi-feed-65041 Sun, 27 Oct 2019 20:37:08 GMT Lebanon Banks' Shutdown Is `Most Potent Case' for Crypto: Nassim Taleb http://implode-explode.com/viewnews/2019-10-27_LebanonBanksShutdownIsMostPotentCaseforCryptoNassimTaleb.html In an ongoing Twitter debate which began on Oct. 24, commentators vented anger on behalf of Lebanon's population, which has been without banking services for more than a week.

Following civil unrest, banks everywhere closed their doors. Six working days later, a senior banking executive said the status quo would continue until conditions improved.

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For well-known Lebanese statistician, former trader and author of "The Black Swan," Nassim Nicholas Taleb, the government's policy was enough to directly endorse cryptocurrencies such as Bitcoin. "The most potent case for cryptocurrencies: banks are never there when you need them," he summarized in a tweet.

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iehi-feed-65039 Sun, 27 Oct 2019 17:10:30 GMT Dubai Faces a ‘Disaster' From Overbuilding, Top Developer Says http://implode-explode.com/viewnews/2019-10-27_DubaiFacesaDisasterFromOverbuildingTopDeveloperSays.html Dubai needs to halt all new home construction for one or two years to avert an economic disaster brought on by continued oversupply, according to one of its biggest builders.

"We're entering a crossroads now," Damac Properties PJSC Chairman Hussain Sajwani said in a Bloomberg interview. "Either we fix this problem and we can grow from here or we are going to see a disaster."

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iehi-feed-65024 Mon, 21 Oct 2019 13:47:08 GMT Cum-ex: German tax case could ripple through the finance industry http://implode-explode.com/viewnews/2019-10-21_CumexGermantaxcasecouldripplethroughthefinanceindustry.html

In cum-ex trades, shares with and without dividend rights were quickly traded between various market participants just before the payout date for the dividend, allowing traders to reclaim double the taxes...

The cum-ex deals orchestrated by the two British bankers on trial in Bonn eventually led to a tax loss of 400 million euros ($443 million).

However, the wider scheme carried out in the first decade of the 21st century, and unearthed in 2017, is thought to have cost state coffers across Europe, including at least 10 countries outside Germany, over $60 billion.

Nearly 500 cum-ex deals worth around 5.5 billion euros are being investigated in Germany, according to the German Finance Ministry. Around 2.4 billion euros has already been recovered by the tax authorities.

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iehi-feed-65019 Sun, 20 Oct 2019 15:34:34 GMT Brexit vote postponed: Here's what could happen now http://implode-explode.com/viewnews/2019-10-20_BrexitvotepostponedHereswhatcouldhappennow.html U.K. Prime Minister Boris Johnson was thwarted by a cross-party group of politicians who voted to postpone the "meaningful vote" on his new divorce deal and force him to ask Brussels for an extension to the current Oct. 31 Brexit deadline. The developments in Parliament set up a complicated week with just 11 days left until the U.K. is still due to leave the world's largest trading bloc.

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Johnson grudgingly asked for an extension to the deadline late on Saturday night, but EU leaders don't necessarily have to accept it. Some have ruled out giving Britain more time, piling pressure on U.K. lawmakers to accept the current deal. But it's unlikely they would want a no-deal scenario and the potential economic hit it could mean for both sides of the English Channel.

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iehi-feed-65015 Fri, 18 Oct 2019 21:11:47 GMT Ray Dalio says the world is in a 'great sag' and echoes the 1930s http://implode-explode.com/viewnews/2019-10-18_RayDaliosaystheworldisinagreatsagandechoesthe1930s.html "This cycle is fading, we are now in the world in what I would call a ‘great sag'," said Dalio, adding that monetary policy, and especially interest rate reductions, were unlikely to offer much stimulus.

"Europe is at the limitation of that, Japan is (too) and the U.S. doesn't have much to go on for that," he told CNBC's Geoff Cutmore.

Dalio said the world was also experiencing the biggest wealth gap since the 1930s and that was creating political stress.

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iehi-feed-65012 Thu, 17 Oct 2019 22:19:09 GMT Holding G-7 at Trump's Doral resort is shameless - The Washington Examiner http://implode-explode.com/viewnews/2019-10-17_HoldingG7atTrumpsDoralresortisshamelessTheWashingtonExaminer.html iehi-feed-65008 Wed, 16 Oct 2019 21:32:56 GMT Brookfield Reveals Pricey Makeover, Address Change For 666 Fifth Ave., Kushner's White Elephant http://implode-explode.com/viewnews/2019-10-16_BrookfieldRevealsPriceyMakeoverAddressChangeFor666FifthAveKushne.html iehi-feed-64997 Fri, 11 Oct 2019 20:42:09 GMT Treasury will again borrow $1 trillion to pay for tax cuts, spending http://implode-explode.com/viewnews/2019-10-11_Treasurywillagainborrow1trilliontopayfortaxcutsspending.html For the second straight year, the Treasury Department will have to borrow $1 trillion to pay for the government's growing budget deficit, a consequence of juiced government spending and smaller revenues as a result of the late 2017 tax cuts, Bloomberg reports.

The big picture: Treasury borrowing surpassed $1 trillion during President Obama's first term as government spending soared amid the stimulus to combat the 2008 financial crisis, but it has steadily declined in the years since, settling down to $519 billion in 2017 before nearly doubling last year.

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