Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-61955 Sun, 26 Mar 2017 15:49:20 GMT Bridgewater Releases Report on Populism http://implode-explode.com/viewnews/2017-03-26_BridgewaterReleasesReportonPopulism.html iehi-feed-61952 Sun, 26 Mar 2017 15:28:48 GMT Week in Review: Stocks See Worst Week Since Election as Trump Dealt Setback With Health-Care Bill http://implode-explode.com/viewnews/2017-03-26_WeekinReviewStocksSeeWorstWeekSinceElectionasTrumpDealtSetbackWi.html iehi-feed-61950 Sat, 25 Mar 2017 15:21:23 GMT Greece to Break Off Face-to-Face Talks as Issues Persist http://implode-explode.com/viewnews/2017-03-25_GreecetoBreakOffFacetoFaceTalksasIssuesPersist.html Greece and the institutions managing its bailout review will break off negotiations in Brussels without having cleared a path to conclude the deliberations that would release needed rescue funds.

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Greece is edging closer to a repeat of the 2015 drama that pushed Europe's most indebted state to the edge of economic collapse, as the government in Athens and its creditors disagree over reforms to the pension system and the labor and energy markets. Greece needs to complete the review in order to get the next portion of its aid payment before it has more than 7 billion euros ($7.6 billion) of bonds come due in July.

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iehi-feed-61945 Fri, 24 Mar 2017 03:00:52 GMT Sovereign Debt Crises Simmer At Opposite Ends of the Global Pecking Order: The U.S., and Greece http://implode-explode.com/viewnews/2017-03-23_SovereignDebtCrisesSimmerAtOppositeEndsoftheGlobalPeckingOrderTh.html On one side of the Atlantic, we have the United States of America, which triggered yet another debt ceiling disaster last Thursday when the US government's maximum allowable debt reset to just over $20 trillion. Of course, the US national debt is pretty much already at $20 trillion... It's a repeat of what happened in 2015. And 2013. And 2011. Pretty amazing to consider that the "richest" country in the world has to plunder retirement funds in order to keep the lights on.

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Greece has had nine different governments since 2009. At least thirteen austerity measures. Multiple bailouts. Severe capital controls. And a full-out debt restructuring in which creditors accepted a 50% loss. Yet despite all these measures GREECE IS STILL IN A DEBT CRISIS.

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iehi-feed-61943 Thu, 23 Mar 2017 21:09:28 GMT Lavish EU 60th Celebration Will Skirt Issues in Stumbling Italy, the Host Country http://implode-explode.com/viewnews/2017-03-23_LavishEU60thCelebrationWillSkirtIssuesinStumblingItalytheHostCou.html "Italy was until very recently at the forefront of the European integration process," Luigi Zingales, professor of finance at University of Chicago Booth School of Business, said in an interview. "Today it's undoubtedly Europe's weakest link."

The economy grew just 0.9 percent last year, below the euro area's 1.7 percent, and unemployment is at 11.9 percent. A recent EU poll put Italy as the monetary union's second-most euro-skeptic state after Cyprus with only 41 percent saying the single currency is "a good thing." The average in the 19-member euro area is 56 percent.

That widespread disenchantment may be felt at elections due in about one year. A poll published on Tuesday by Corriere della Sera put support for the Five Star Movement, which calls for a referendum to ditch the euro, at a record 32.3 percent, well ahead of the ruling Democratic Party. Summit host Prime Minister Paolo Gentiloni has only been in power since December, when Matteo Renzi resigned after losing a constitutional reform referendum.

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iehi-feed-61938 Thu, 23 Mar 2017 16:52:24 GMT Apparent Hacked Texts From Manafort's Daughters Refer to Ukraine "Blood Money" http://implode-explode.com/viewnews/2017-03-23_ApparentHackedTextsFromManafortsDaughtersRefertoUkraineBloodMone.html ``In a series of texts reviewed by Business Insider that appear to have been sent by Andrea to her sister, Jessica, in March 2015, Andrea said their father had "no moral or legal compass." "Don't fool yourself," Andrea wrote to her sister, according to the texts. "That money we have is blood money."

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In a later exchange with a man who appeared to be Andrea's cousin -- and one of her father's former employees -- Collin Bond, Andrea appears to have said her mother and father couldn't go through a "public divorce" because Manafort had "too many skeletons" and "his work and payment in Ukraine is legally questionable."

This is certainly not good for Paulie (and by somewhat-attenuated connection, Trump). Our suspicion around here is that the bribes and related corruption allegations are in fact true (it's certainly easy to deny one didn't ever receive nearly $1M in bribe money if it was all in cash) -- and this is just some of more evidence that keeps surfacing in recent weeks supporting that case.

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iehi-feed-61931 Wed, 22 Mar 2017 14:42:18 GMT US "Too Big To Fail" Banks Top $1 Trillion - What Happens Next? http://implode-explode.com/viewnews/2017-03-22_USTooBigToFailBanksTop1TrillionWhatHappensNext.html iehi-feed-61928 Tue, 21 Mar 2017 15:31:34 GMT H-1B Visa Reform Actually Needed... But Trump Looks Set To Punt It http://implode-explode.com/viewnews/2017-03-21_H1BVisaReformActuallyNeededButTrumpLooksSetToPuntIt.html As Bloomberg describes tonight, H-1B visa applications are due at the beginning of April, so if the Trump Administration fails to implement its fixes by then, it's at least a year before they'll have any effect. Moreover, the lack of apparent momentum on this front does not bode well for meaningful changes.

... the program has moved almost entirely away from its original goals. One aim was to import workers when employers couldn't find qualified Americans. The second was to cap the number of H-1B holders, since both the bill's drafters and industry lobbyists wanted companies to bring in "talent" via green cards and help them become citizens, rather than rent them.

The result instead has been the creation of a large industry of foreign workers who largely work abroad. Not only do they undercut US wages and eliminate entry-level jobs, meaning the US is no longer developing its own tech professionals, but the fact that much of the work is done overseas also results in reduced taxes to states and municipalities.

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In the U.S., outsourcers bring staffers into the country on work visas, train them in the tech departments of leading corporations and then rotate them back to India where pay and living costs are lower. Outsourcing companies now get far more visas than traditional technology companies, according to data collected by Howard University's Ron Hira through Freedom of Information Act requests.

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iehi-feed-61927 Tue, 21 Mar 2017 15:18:47 GMT Defeat in Victory (Netherlands) http://implode-explode.com/viewnews/2017-03-21_DefeatinVictoryNetherlands.html iehi-feed-61925 Tue, 21 Mar 2017 15:07:42 GMT Why Trump will have to trash the dollar to create jobs http://implode-explode.com/viewnews/2017-03-21_WhyTrumpwillhavetotrashthedollartocreatejobs.html Trump may just be blowing smoke when he talks about tariffs and border-adjustment taxes.

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The collapse of American manufacturing towns, and the old industrial middle class, has gone hand in hand with a staggering 40-year rise in the dollar, Klody observed. It is standard economics that as your currency rises, your exports become more expensive and less competitive in foreign markets.

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Klody noted that since the mid-1970s, the U.S. dollar has quadrupled in price -- yes, really -- when measured against the Federal Reserve's broad basket of foreign currencies.

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Since the early 1990s, the Mexican peso has collapsed from 32 U.S. cents to only 5 cents. That's a huge windfall to Mexican manufacturers -- far greater, one suspects, than NAFTA's reduction in tariffs. During that time, the price in dollars of the Vietnamese currency, the dong, has nearly halved. The Indian rupee has more than halved. And so on.

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iehi-feed-61923 Tue, 21 Mar 2017 00:12:49 GMT Chinese Home Prices Heat Up Again, As Government Gets Cold Feet http://implode-explode.com/viewnews/2017-03-20_ChineseHomePricesHeatUpAgainAsGovernmentGetsColdFeet.html On month-over-month basis, house price growth diverged among different city tiers. Home price inflation decelerated in tier-1 cities, but home price inflation in tier 2/3/4 cities was steady or accelerated, which goes back to the core issue discussed last Friday: for all the talk about moderating home prices, China is first and foremost focused on preserving the wealth effect, which a sharp drop in home prices would crush.

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In short, China evaluted the risk of a potential housing bubble burst, and deciding that - at least for the time being - it is not worth the threat of losing a third of Chinese GDP in "wealth effect", got cold feet.

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iehi-feed-61922 Tue, 21 Mar 2017 00:07:43 GMT Central Bank Shell Game: What Sweden's Negative Interest Rates Do to Consumers http://implode-explode.com/viewnews/2017-03-20_CentralBankShellGameWhatSwedensNegativeInterestRatesDotoConsumer.html the "Swedish Model" is under attack. The egalitarian underpinnings, unwinding with the negative rates, are driving a wedge into Swedish society, creating extremes on both sides of the economic spectrum. The rampant consumerism, encouraged by artificially low rates, continues to widen the wealth gap. Coincidentally, the middle class deteriorated the most between 2014 and 2015: the same time that deposit rates took a dive. Furthermore, the negative savings rates are driving the average person to "gamble" on speculative investments instead of saving and building a future over the long term.

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Recently, inflation has been heating up. Near zero from 2013 to 2015, it edged up to almost 1% in 2016, and printed 1.8% in February. Much of it is supply driven: rising import prices attributed to a falling SEK. The real interest rates fell to negative -2.3% (Repo Rate minus Inflation) last month. At some point, Riksbank will either have to raise rates or the government will have to intervene to avert a currency crisis.

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It is clear that the negative rate experiment is neither sustainable nor helpful to economic growth. It only inflates bubbles while widening the wealth gap in Swedish society. A once prudent and financially conservative people are now getting drunk on debt, wrecking their future. The very premise of Swedish society is under attack. Nevertheless, it does not appear that this policy will abate anytime soon.

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iehi-feed-61921 Mon, 20 Mar 2017 16:11:35 GMT The Fed's Global Dollar Problem http://implode-explode.com/viewnews/2017-03-20_TheFedsGlobalDollarProblem.html iehi-feed-61920 Mon, 20 Mar 2017 16:09:58 GMT Euro zone's Jeroen Dijsselbloem calls for ESM to be turned into a European IMF http://implode-explode.com/viewnews/2017-03-20_EurozonesJeroenDijsselbloemcallsforESMtobeturnedintoaEuropeanIMF.html The European Stability Mechanism (ESM) - the euro zone's bailout fund - should ultimately be turned into a European version of the International Monetary Fund, the head of euro zone finance ministers told a German newspaper.

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He said that would also mean that Greece's current "troika" of lenders -- the European Commission, European Central Bank and the IMF -- would need to be broken up in the longer term.

"The ECB feels increasingly uncomfortable in its troika role, and rightly so I think," Dijsselbloem said, adding that the European Commission had other "important tasks" that it should concentrate on.He said the ESM should "build up the technical expertise that only the IMF has at the moment".

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iehi-feed-61919 Mon, 20 Mar 2017 14:35:37 GMT Greece Edges Toward Another Crisis as Bailout Quarrel Persists http://implode-explode.com/viewnews/2017-03-20_GreeceEdgesTowardAnotherCrisisasBailoutQuarrelPersists.html Greece is set to miss yet another deadline for unlocking bailout funds this week, edging closer to a repeat of the 2015 drama that pushed Europe's most indebted state to the edge of economic collapse.... While Tsipras had promised the long delayed review of the latest bailout would be completed by March 20, a European official said last week that reaching an agreement even in April is now considered a long shot.

... The two sides are still far apart on reforms demanded by creditors in the Greek energy market and the government in Athens is resisting calls for additional pension cuts. And while discussions continue on how to overhaul the labor market, a finance ministry official said in an email to reporters on Friday that the issue can't be solved in talks with technocrats.

... Even as Greek bonds have performed better than most of its euro-area peers this year on expectations that the government will capitulate, uncertainty has weighed on economic activity, raising the risk that an additional bailout may be needed. Unemployment rose in the last quarter of 2016, the economy unexpectedly contracted, and a bleeding of deposits from the nation's battered lenders resumed.

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iehi-feed-61916 Sun, 19 Mar 2017 17:30:55 GMT More Proof of Janet Yellen's Idiocy - David Stockman http://implode-explode.com/viewnews/2017-03-19_MoreProofofJanetYellensIdiocyDavidStockman.html ... the market is priced as if the business cycle has been outlawed and as if the feckless band of Keynesian pretenders who have seized control of financial markets have ushered in the Nirvana of permanent full-employment.

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if the Fed plans to keep raising until rates until they reach 3.0% by 2019, it will have to suck massive amounts of cash out of the financial markets. So doing, it will drive long-term yields substantially higher and thereby obliterate the ultra-low cap rate delusion on which the entire regime of Bubble Finance is based.

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Yellen proved she is clueless about the financial firestorm our rogue central bank is about to unleash. She claimed that the Fed could implement 3-4 money market rate increases a year, while deferring the shrinkage of its balance sheet into the indefinite future. But that it most assuredly cannot do.

With a staggering overhang of $2.1 trillion of excess reserves in the financial system, even our vaunted monetary politburo cannot command the tides to recede. If it wants the money rate to rise on its appointed path through 2019, it must drain loads of cash from Wall Street.

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iehi-feed-61915 Sun, 19 Mar 2017 01:47:29 GMT ECB Trapped in its Own "Doom Loop" as Inflation Surges http://implode-explode.com/viewnews/2017-03-18_ECBTrappedinitsOwnDoomLoopasInflationSurges.html To the ECB's barely contained glee, inflation is back, alive, kicking and biting, in the Eurozone. In February, for the first time in four years, the region-wide 12-month inflation rate reached 2%.... In Spain it was 3% in both January and February, having almost doubled from the 1.6% rate recorded in December, 2016. The last time it was that high was in October 2012. The biggest mover in January were energy prices, propelled by rising global prices as well as regulatory changes, while in February the biggest driver was food prices, with fresh fruit alone surging 7.6%.

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If the central bank begins tapering, and investors get wind that it is buying fewer Italian bonds, investors will begin selling, triggering downward spiraling prices and rising yields. In a repeat of 2012, Italy's government will start having difficulty servicing its debt, which will merely serve to exacerbate the sell-off.

Despite the ECB's QE program, the biggest holders of sovereign bonds are still European resident banks, reports Breugel. In other words, the Doom Loop is still intact, just waiting to be set in motion.

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iehi-feed-61914 Sun, 19 Mar 2017 01:35:48 GMT Deepening EU Banking Crisis Meets Euro-TARP, Taxpayers http://implode-explode.com/viewnews/2017-03-18_DeepeningEUBankingCrisisMeetsEuroTARPTaxpayers.html ... the European banking sector may face even higher bad loan risks if the ECB begins to scale back its monetary stimulus programs, something it has already begun, albeit extremely tentatively. The total stock of non-performing loans (NPL) in the EU is estimated at over €1 trillion, or 5.4% of total loans, a ratio three times higher than in other major regions of the world.

... someone else must step in, and soon. And that someone is almost certain to be the European taxpayer.

In February ECB Vice President Vitor Constancio called for the creation of a whole new class of government-backed "bad banks" to help buy some of the €1 trillion of bad loans putrefying on bank balance sheets. Constancio's idea bore a striking resemblance to a formal proposal put forward by the European Banking Authority (EBA) for the creation of a massive EU-wide bad bank that, in the words of EBA president Andrea Enria, would "make it much easier to achieve critical mass and to create a well functioning market for (impaired) assets."

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iehi-feed-61913 Sat, 18 Mar 2017 23:53:03 GMT World Out Of Whack: What's Next For Global Real Estate? http://implode-explode.com/viewnews/2017-03-18_WorldOutOfWhackWhatsNextForGlobalRealEstate.html iehi-feed-61912 Sat, 18 Mar 2017 19:04:00 GMT A Bad Week and Getting Badder Bigly Fast - KUNSTLER http://implode-explode.com/viewnews/2017-03-18_ABadWeekandGettingBadderBiglyFastKUNSTLER.html ... the longer a debt ceiling stalemate goes on in congress, the more trapped President Trump will be. The cherry on top is the Federal Reserve's move to raise interest rates the same day the debt ceiling truce expired. That will thunder through the system, making many loans more expensive to repay, dampening the real estate markets (at a time when commercial real estate is already tanking), and draining all kinds of other mojo (however falsely engineered) from the Potemkin economy.

As if being trapped in a political minefield isn't bad enough, the remaining safe patch Trump is stranded on turns out to be the LaBrea Tar Pit of health care reform. At this point, the crusade is doing worse than going nowhere -- it's getting sucked into the primordial bitumen where the mastodons and camelops sleep.

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