Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-64540 Thu, 17 Jan 2019 21:02:50 GMT Brexit: France activates no-deal plan; Others likely follow http://implode-explode.com/viewnews/2019-01-17_BrexitFranceactivatesnodealplanOtherslikelyfollow.html The Netherlands' foreign trade minister, Sigrid Kaag, said on Wednesday night that the Netherlands was launching a major information campaign on 28 January.

"After Ireland, the Dutch economy is most entwined with that of the UK," she said, citing fisheries, meat-processing and flower exports. She warned that many small and medium enterprises had failed to make sufficient preparation for a no-deal Brexit.

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Germany's foreign minister, Heiko Maas, said on Thursday that plans for a disorderly Brexit would have to be stepped up.

"In the coming days and weeks, we will do everything we can so that Britain exits with and not without an agreement," he told the Bundestag (German parliament).

Spain said on Thursday that staffing of immigration offices would be beefed up if the UK left the EU without a deal. Some 310,000 UK citizens live in Spain and they would have to confirm their residency under a no-deal Brexit, officials said.''

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iehi-feed-64532 Wed, 16 Jan 2019 01:34:49 GMT British pound strengthens after parliament rejects Brexit plan http://implode-explode.com/viewnews/2019-01-15_BritishpoundstrengthensafterparliamentrejectsBrexitplan.html Parliament on Tuesday struck down the divorce deal that Prime Minister Theresa May had negotiated with the rest of the European Union by a record margin. The defeat was expected, but the size of the loss -- 432 votes to 202 -- was a surprise.

The pound, which had fallen below $1.27 earlier on Tuesday, erased its losses after the vote and strengthened to $1.28. Some analysts had predicted the pound would rally if May suffered a major defeat because that would raise the chance of Brexit being delayed.

The crushing loss means parliament may now wield greater control over the process. Capital Economics said lawmakers could move to delay Brexit while they work on alternatives.

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iehi-feed-64529 Fri, 11 Jan 2019 01:28:00 GMT Mnuchin becomes first Trump official called by Democratic House to answer questions about Russia http://implode-explode.com/viewnews/2019-01-10_MnuchinbecomesfirstTrumpofficialcalledbyDemocraticHousetoanswerq.html iehi-feed-64509 Wed, 02 Jan 2019 23:46:27 GMT Markets plunge; China angst; Trump and the shutdown http://implode-explode.com/viewnews/2019-01-02_MarketsplungeChinaangstTrumpandtheshutdown.html iehi-feed-64507 Tue, 01 Jan 2019 16:19:22 GMT What 46 Populist Leaders Did to Democracy - The Atlantic http://implode-explode.com/viewnews/2019-01-01_What46PopulistLeadersDidtoDemocracyTheAtlantic.html Populists aren't just more likely to win reelection once or twice; they are also much more likely to remain in power for well over a decade. Six years after they are first elected, populist leaders are twice as likely as non-populist leaders to still be in power; twelve years after they are first elected, they are more than five times as likely.

... only 17 percent of populists stepped down after they lost free and fair elections. Another 17 percent vacated high office after they reached their term limits. But 23 percent left office under more dramatic circumstances--they were impeached or forced to resign. Another 30 percent of all populist leaders in our database remain in power to this day. This is partially a function of the recent rise of populism: Thirty-six percent of those populist rulers who still remain in power were elected over the past five years. But even more of them have been in office long enough to raise serious concerns: About half have led their country for at least nine years.

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In many countries, populists rewrote the rules of the game to permanently tilt the electoral playing field in their favor. Indeed, an astounding 50 percent of populists either rewrote or amended their country's constitution when they gained power, frequently with the aim of eliminating presidential term limits and reducing checks and balances on executive power.

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Since 1990, 13 right-wing populist governments have been elected; of these, five brought about significant democratic backsliding. Over the same time period, 15 left-wing populist governments were elected; of these, the same number, five, brought about significant democratic backsliding. This suggests that left-wing populists are not likely to be a cure for right-wing populism; they are, on the contrary, likely to accelerate the speed with which democracy burns out.''

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iehi-feed-64503 Sun, 30 Dec 2018 21:00:00 GMT This Radical Plan to Fund the ‘Green New Deal' Just Might Work http://implode-explode.com/viewnews/2018-12-30_ThisRadicalPlantoFundtheGreenNewDealJustMightWork.html Abenomics has been declared a success even by the once-critical International Monetary Fund. After Abe crushed his opponents in 2017, Noah Smith wrote in Bloomberg, "Japan's long-ruling Liberal Democratic Party has figured out a novel and interesting way to stay in power--govern pragmatically, focus on the economy and give people what they want." Smith said everyone who wanted a job had one, small and midsize businesses were doing well; and the Bank of Japan's unprecedented program of monetary easing had provided easy credit for corporate restructuring without generating inflation. Abe had also vowed to make both preschool and college free.

Not that all is idyllic in Japan. Forty percent of Japanese workers lack secure full-time employment and adequate pensions. But the point underscored here is that large-scale digital money-printing by the central bank to buy back the government's debt, combined with fiscal stimulus by the government (spending on "what the people want"), has not inflated Japanese prices, the alleged concern preventing other countries from doing the same.

There seem to be some good ideas about public banking/national-treasury-based lending in here. However, it's not at all clear the non-inflationary result can be separated from general conditions of austerity present in the same economies (of course, if general depressionary conditions are a prerequisite for public banking recovery programmes to work en masse, that might both explain this result and motivate for its use under particular conditions).

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iehi-feed-64489 Fri, 21 Dec 2018 00:54:53 GMT SoftBank's Biggest Backers Balk at Planned $16 Billion Acquisition of WeWork http://implode-explode.com/viewnews/2018-12-20_SoftBanksBiggestBackersBalkatPlanned16BillionAcquisitionofWeWork.html Key investors in SoftBank Group Corp.'s giant tech fund have balked at a planned $16 billion investment in co-working startup WeWork Cos., leaving SoftBank Chief Executive Masayoshi Son to find an alternative as his ambitions hit up against the limits of his financial firepower. Government-backed funds in Saudi Arabia and Abu Dhabi, according to people familiar with the matter, have told SoftBank executives they have concerns about SoftBank's negotiations to buy a majority of money-losing WeWork, whose industrial-chic workspaces workspaces and short-term leases have made it one of the world's hottest startups.

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Saudi Arabia's Public Investment Fund, or PIF, and Abu Dhabi's Mubadala Investment Co. contributed the bulk of the nearly $100 billion raised by the SoftBank Vision Fund. Their size gives them an effective veto over certain investments and a loud voice in validating Mr. Son's moves.

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Some of the people said that PIF and Mubadala have questioned the wisdom of doubling down on WeWork, and have cast doubt on its rich valuation. The company is on track to lose around $2 billion this year, and the funds have expressed concern that WeWork's model could leave it exposed if the economy turns down, some of the people said.

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Mr. Son still hopes the sovereign funds will let the Vision Fund pay for some of the deal, one of the people said. SoftBank is considering other ways to fund the deal, including using its own cash, raising debt and bringing in outside investors, the person said. It may use the proceeds from the initial public offering of its Japanese telecom business. SoftBank already carries heavy debt: nearly ¥18 trillion, or roughly $158 billion, as of Sept. 30

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iehi-feed-64485 Thu, 20 Dec 2018 15:19:05 GMT World stocks suffer as Fed heightens recession fears http://implode-explode.com/viewnews/2018-12-20_WorldstockssufferasFedheightensrecessionfears.html The Fed on Wednesday stuck by a plan to keep withdrawing support from an economy it views as strong, hiking key overnight lending rates, as expected, by 0.25 percent points.

It said "some further gradual" rate hikes would be needed in the year ahead, with policymakers projecting two rises on average next year instead of the three predicted in September.

Although largely in line with expectations, that tweak failed to soothe a cocktail of market fears over slowing world growth, U.S. trade tensions with China, and tightening monetary conditions for companies in the world's biggest economy.

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iehi-feed-64484 Wed, 19 Dec 2018 20:33:27 GMT 100 days to Brexit, EU tells London - financiers on their own without a deal http://implode-explode.com/viewnews/2018-12-19_100daystoBrexitEUtellsLondonfinanciersontheirownwithoutadeal.html iehi-feed-64477 Mon, 17 Dec 2018 18:31:48 GMT Goldman Sachs Faces First Criminal Charges in 1MDB Scandal http://implode-explode.com/viewnews/2018-12-17_GoldmanSachsFacesFirstCriminalChargesin1MDBScandal.html iehi-feed-64473 Sun, 16 Dec 2018 17:36:49 GMT Doug Noland: The Perils of Inflationism http://implode-explode.com/viewnews/2018-12-16_DougNolandThePerilsofInflationism.html What only weeks ago appeared a rather straightforward meeting is now a pivotal juncture for the Federal Open Market Committee. With low unemployment and relatively robust household and business expenditures, the Fed has been widely expected to raise rates next Wednesday. It may now be a close call. But, then again, the Fed may not yet appreciate the seriousness of what is unfolding in the markets. They're in a real predicament, along with central bankers around the world. They all waited way too long to begin normalizing monetary policy. Today, normalization has barely even commenced, and yet the Bubble they nurtured has already begun to deflate.

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I don't want to imply that resurgent Chinese Credit growth and/or even a more dovish Fed wouldn't matter. I just believe at this point the bursting global Bubble is increasingly beyond resuscitation. A bold statement, I fully appreciate. But Fear is rapidly supplanting greed in "Core" U.S. securities markets. The "Core" has seen de-risking/deleveraging dynamics attain important momentum. Latent "Core" fragilities are being exposed. And the further the global Bubble deflates, the greater the scope of monetary stimulus required to re-energize broad-based securities market inflation. I fully expect more QE. But it will come in a crisis backdrop. I'll presume the first few Trillion or so will, at best, accommodate deleveraging.

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iehi-feed-64470 Fri, 14 Dec 2018 23:41:49 GMT The End of QE Will Always Devolve Into This Sort of Incoherent Mess http://implode-explode.com/viewnews/2018-12-14_TheEndofQEWillAlwaysDevolveIntoThisSortofIncoherentMess.html Draghi claimed today, again the circus, that at some points "QE has been the only driver of this recovery." Even if that statement is true, it can't have been a recovery. The term itself has been so misused, to attempt to reverse engineer some measure of success for the policy.

John Maynard Keynes would be spinning in his grave. Monetary as fiscal policy is supposed to spur the organic processes that then lead to sustained economic growth (pump priming). If it is the only thing moving the economy forward (itself debatable), it has failed on its own terms.

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iehi-feed-64468 Thu, 13 Dec 2018 22:03:31 GMT The Curious Rush To Combine German Banks http://implode-explode.com/viewnews/2018-12-13_TheCuriousRushToCombineGermanBanks.html German officials are laying the groundwork to change the nation's banking laws so that it's two largest banks, really "banks", can more easily combine. If it should ever come to that... DB would have to convert to a holding company triggering revaluation of assets and then the tax consequences of those. Unless, of course, auditing the bank's standing book reveals other malformities taking things in a different direction.

It's not just the rush toward marriage, it's more so who with. DB is both the target and the presumptive acquirer, an already odd situation. And if there is a healthy counterpart to DB's sickening status it's surely not Commerzbank, the institution being whispered up for combination.

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All of these things are related, furthermore connected to Germany's vulnerable external financing requirements ("dollar short"). DB's, as Commerzbank's, declining revenues and overall position indeed have led to a great contribution to the global "dollar shortage." The "dollar short" persists regardless, meaning that rock has met hard place; "funding costs have continued to rise" because these things become self-reinforcing.

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The bank raised significant capital early on in [2014], ostensibly to complete its comeback from the 2008 break. Having been fixed, and compliant with new regulations in full, what did DB's management decide was its best course? Unlike most of its other peers who were actively retreating, Deutsche plunged headlong into the riskiest assets -- global junk, including US corporates as well as US$ EM junk (Eurobonds).

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iehi-feed-64464 Wed, 12 Dec 2018 16:03:03 GMT Theresa May Faces No-Confidence Vote Wednesday Over Brexit Anger http://implode-explode.com/viewnews/2018-12-12_TheresaMayFacesNoConfidenceVoteWednesdayOverBrexitAnger.html iehi-feed-64461 Tue, 11 Dec 2018 05:09:50 GMT Manic Monday: Britain plunges deeper into Brexit crisis http://implode-explode.com/viewnews/2018-12-11_ManicMondayBritainplungesdeeperintoBrexitcrisis.html It all started in the morning, when in a landmark ruling the European Union's top court said the UK may unilaterally reverse its decision to leave the 28-member bloc prior to its scheduled exit on March 29 next year.

By early noon, May's already tenuous grip on Brexit appeared further weakened as whispers began to circulate that she would postpone a parliamentary voteon the widely criticised Brexit deal she negotiated with the EU, contradicting statements made by several officials earlier in the day.

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When May finally announced that Tuesday's vote was being delayed, acknowledging that her agreement would have been rejected, opposition MPs accused her of "losing control of events" and members of her own ruling party called on her to "govern or quit".

"The situation is utterly confused," said Simon Usherwood, a reader in politics at the University of Surrey and deputy director of the UK in a Changing Europe group.

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iehi-feed-64456 Sun, 09 Dec 2018 16:45:17 GMT China warns of "grave consequences" if Huawei executive isn't released http://implode-explode.com/viewnews/2018-12-09_ChinawarnsofgraveconsequencesifHuaweiexecutiveisntreleased.html iehi-feed-64452 Fri, 07 Dec 2018 21:22:48 GMT Dow plunges for third straight day on weak jobs report and renewed trade tensions http://implode-explode.com/viewnews/2018-12-07_Dowplungesforthirdstraightdayonweakjobsreportandrenewedtradetens.html The Dow Jones Industrial Average dropped by 558 points on Friday, capping a wild week of trading that saw the blue-chip index lose more than 4 percent of its value.

The Dow started the day with a spike of 150 points after the Department of Labor released a generally tepid jobs report, only to plummet by mid-afternoon to a session low of 662 points down as markets continued to absorb the destabilizing impact of President Donald Trump's protectionist trade policies.

The broader S&P 500 lost 2.3 percent of its value, and a tech sell-off fueled a drop of 3 percent on the Nasdaq composite index. Tech giants Alphabet and Apple both lost all of their gains for the year. Apple's share price has been steadily falling after a litany of analysts cut their price targets for the smartphone maker amid concern over waning demand for the iPhone.

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iehi-feed-64450 Fri, 07 Dec 2018 00:06:57 GMT Brexit vote: What could happen next? http://implode-explode.com/viewnews/2018-12-06_BrexitvoteWhatcouldhappennext.html iehi-feed-64449 Thu, 06 Dec 2018 20:16:32 GMT Does Trump Even Understand How Tariffs Work? http://implode-explode.com/viewnews/2018-12-06_DoesTrumpEvenUnderstandHowTariffsWork.html This weekend, President Donald Trump announced a major economic deal with Beijing. "China has agreed to reduce and remove tariffs on cars," he wrote on Twitter. "Farmers will be a a very BIG and FAST beneficiary of our deal with China. They intend to start purchasing agricultural product immediately," he added. "Farmers, I LOVE YOU!"

A few days later, Trump flip-flopped. "We are either going to have a REAL DEAL with China, or no deal at all--at which point we will be charging major Tariffs," he wrote. "If a fair deal is able to be made with China, one that does all of the many things we know must be finally done, I will happily sign. Let the negotiations begin."

These quick-succession declarations roiled markets: Stock prices bounced and then plunged as traders responded to good news (a potential U.S.-China deal) and bad (the apparent lack of a "REAL DEAL"). It seems trade wars are not, in fact, good and easy to win--especially if it is not clear what winning looks like. For all of Trump's bellowing about tariffs and China and trade, his goals and strategies remain confused and confusing, and much of what he wishes to accomplish might be impossible.

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iehi-feed-64447 Thu, 06 Dec 2018 15:43:50 GMT Dow Jones falls 1.8% amid panic selling in Asia and Europe http://implode-explode.com/viewnews/2018-12-06_DowJonesfalls18amidpanicsellinginAsiaandEurope.html