Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-62138 Tue, 25 Apr 2017 02:58:01 GMT Trump seeks 15 percent corporate tax rate, even if it swells the national debt http://implode-explode.com/viewnews/2017-04-24_Trumpseeks15percentcorporatetaxrateevenifitswellsthenationaldebt.html President Trump is pursuing a drastic cut in the corporate tax rate, a move that is likely to grow the national debt and breach a long-held Republican goal of curbing federal borrowing.

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Trump surprised lawmakers -- and even many advisers -- last week when he announced he would release details of his tax plan on Wednesday. Advisers said Trump is eager to make a mark on a top issue before the 100-day anniversary of his administration, after being frustrated by House Republicans over the failure to advance legislation to replace the Affordable Care Act.

But several House Republicans close to Ryan said that they were taken aback by the latest tax push. They said the president risked alienating the speaker and his allies on Capitol Hill if they got behind a proposal that had weak or fragile support in the chamber, and they expressed concern about Congress piling up too many issues this week, such as a revived effort to pass a health-care overhaul and keep the government funded while funneling money toward border security projects.

... lawmakers from both parties have said the corporate tax rate must be reduced to help U.S. companies compete with firms headquartered in other countries and to prevent U.S. firms from moving overseas.

The Tax Policy Center, a nonpartisan tax group affiliated with the Brookings Institution and Urban Institute, has estimated that Trump's corporate tax proposal, as outlined during the campaign, would cost $2.4 trillion over 10 years.

"Deficits don't matter"!

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iehi-feed-62133 Mon, 24 Apr 2017 19:37:31 GMT "Fear City" Explores U.S. Instance of "Shock Doctrine" -- And Trump's Connection To It http://implode-explode.com/viewnews/2017-04-24_FearCityExploresUSInstanceofShockDoctrineAndTrumpsConnectionToIt.html New York's debt crisis is an incredibly important and little understood chapter in the evolution of what Nobel Prize-winning economist Joseph Stiglitz calls market fundamentalism, a process the Trump administration is in the process of rapidly accelerating, which is why I was so happy to receive Kim Phillips-Fein's remarkable new book, "Fear City." In it, she meticulously documents how the remaking of New York City in the '70s was a prelude to what would become a global ideological tidal wave, one that has left the world brutally divided between the 1 percent and the rest. She helps us to understand many of the forces that Trump exploited to win the White House, from economic insecurity to crumbling public infrastructure to fearmongering about black crime, all amid previously unimaginable private wealth.

But one of the things that really stood out for me in the book is what it reveals about Trump himself. "Fear City" tells the story of how a brash 29-year-old real estate developer seized on the city's misfortune to boost his own fortune, extracting predatory terms from a community in crisis.

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iehi-feed-62132 Mon, 24 Apr 2017 16:00:11 GMT Euro and shares rally after Emmanuel Macron wins first voting round of French election http://implode-explode.com/viewnews/2017-04-24_EuroandsharesrallyafterEmmanuelMacronwinsfirstvotingroundofFrenc.html "Macron will be reassuring to markets, with his pledge to lower corporate taxes and to lighten the administrative burden on firms. He basically represents continuity," said Octavio Marenzi, CEO of Opimas, a capital markets management consultancy.

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According to the latest polling of voters' intentions in the second round, Mr Macron is forecast to beat Ms Le Pen by 62 per cent to 38 per cent, with many political figures quick to join the 'anyone but Le Pen camp'.

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iehi-feed-62130 Mon, 24 Apr 2017 14:23:52 GMT America is Regressing into a Developing Nation for Most People http://implode-explode.com/viewnews/2017-04-24_AmericaisRegressingintoaDevelopingNationforMostPeople.html iehi-feed-62125 Sun, 23 Apr 2017 20:06:10 GMT Outsiders "Storm Bastille" in France: Macron and Le Pen Take Lead (Respectively); Will Face-Off http://implode-explode.com/viewnews/2017-04-23_OutsidersStormBastilleinFranceMacronandLePenTakeLeadRespectively.html The storming of the Bastille in 1789 sets the bar high. As a result, few phrases should be used with more circumspection than "French revolution". But the result of the first round of France's 2017 presidential election is an epochal political upheaval for France all the same. For the first time in the nearly 60-year history of the Fifth Republic the second-round contest on 7 May will be between two outsider candidates, Emmanuel Macron and Marine Le Pen. Neither of the candidates of the established parties of left and right will be in the runoff. Whichever of the second-round candidates emerges as the winner in two weeks' time, France is set upon a new political course, with major implications for itself and for the rest of Europe.

The defeat of the established parties is a humiliation for modern French party politics of left and right. The Socialist candidate Benoît Hamon, representing the party of the outgoing president François Hollande, received a mere 6.2% of the votes, according to early estimates. The conservative candidate François Fillon, carrier of the tarnished Gaullist baton, did better, with 19.7%. Yet this is the first time that an official centre-right candidate has failed to get into the second round since General de Gaulle created modern France in 1958. Given the scandals about his use of public funds, it was remarkable that Mr Fillon did so well. Even so, between them Mr Hamon and Mr Fillon took only a quarter of the votes. Instead three French voters out of four, in a turnout of 78%, voted for change.

Le Pen is projected to have pulled 21.9%, and Macron 23.7%, making him the favorite. However, anything can happen as the remaining votes (a majority) are re-allocated... and a lot can happen between now and May 7th.

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iehi-feed-62123 Sun, 23 Apr 2017 13:37:38 GMT Doug Noland: Liquidity Supernova and the Big Ugly Flaw http://implode-explode.com/viewnews/2017-04-23_DougNolandLiquiditySupernovaandtheBigUglyFlaw.html iehi-feed-62120 Fri, 21 Apr 2017 21:36:21 GMT Weekend Reading: Move Over UBI - The "Guaranteed Job" Solves A Lot More Problems http://implode-explode.com/viewnews/2017-04-21_WeekendReadingMoveOverUBITheGuaranteedJobSolvesALotMoreProblems.html With full employment, the capitalists lose their leverage to depress workers' wages and must give up more profits. But, more than that, when it comes to running endeavors that are ostensibly "theirs," the capitalists are forced to bargain with and bend to the will of workers "below" them. Their position as the demigods of the economy--granting employment when they are appeased, and taking it away when they are angered--is undone.

Capitalists do not want recessions, of course, since their income and wealth holdings suffer as well. But they don't want the economy running at full steam, either. Their solution, as John Maynard Keynes put it, has been "abolishing booms and thus keeping us permanently in a quasi-slump." Perhaps this sounds familiar.

In defiance of this economic regime, the job guarantee asserts that, if individuals bear a moral duty to work, then society and employers bear a reciprocal moral duty to provide good, dignified work for all. It would finally make real the ideal, stated in Franklin Roosevelt's "Economic Bill of Rights," that every American possesses a "right to a useful and remunerative job" and "to earn enough to provide adequate food and clothing and recreation." Not a paternalistic aid, and not some tribute to aristocratic virtue, but a right to be claimed and exercised. ''

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Intriguing is the direct tie-in to ending the central banking-dysfunction, which is in place in large part supposedly to ameliorate recessions and the destruction of jobs:

From then on, every private sector recession would swell the ranks of job-guarantee recipients again, but never by that much. Right now, recessions feed on themselves: People lose jobs, their consumption drops, so more people lose jobs, until the recession bottoms out. But employment through the job guarantee is limited only by human imagination and ingenuity. A recession is just a collapse in the private sector's ability to employ everyone according to the capitalists' priorities. So recessions would simply throw workers onto the job guarantee's alternate employment, with its attendant wage floor. The bottom for recessions would be much shallower, and recoveries much faster, shrinking the job guarantee rolls again. We would be spared the human and social wreckage that comes with spells of mass unemployment. Preventing mass joblessness would prove far cheaper than eliminating it once it's set in.

An even more intriguing possibility is that the job guarantee would eliminate the need for the Fed to adjust interest rates... with a job guarantee, the downturn would simply move workers onto the set wage and compensation rate, which doesn't engage in a bidding war. This would end the arms race as well, but without casting people into joblessness and all its attendant human destruction. So the job guarantee could stabilize the ups and downs of inflation as well.

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iehi-feed-62119 Fri, 21 Apr 2017 16:18:39 GMT Analyst Who Predicted Trump's Ascendancy Bets on Le Pen Win http://implode-explode.com/viewnews/2017-04-21_AnalystWhoPredictedTrumpsAscendancyBetsonLePenWin.html "The market is talking about the nightmare scenario but it's not pricing it in" said Mark Tinker, head of AXA Framlington Asia. Tinker's a GaveKal client, and admirer of Gave's tail-risk warnings over the past year. "After Sunday, we will have more information to make a considered risk-return wager to trade and hedge, but high-quality European companies and German bonds look like an attractive bet," Tinker said.

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The euro held steady on Friday and French bonds gained after a police officer was shot in Paris, which may influence the outcome of the first-round vote, according to some analysts. The CAC 40 dropped for the first time in three days, declining 0.5 percent.

The stars, however, appear to be aligning for the National Front candidate, said Gave. The fact two candidates for the runoff are likely to be determined by voters who have yet to make up their minds -- as many as 40 percent -- is a bad omen for the centrist contender, he said.

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Supporters of Francois Fillon, a center-right candidate whose momentum has been curtailed by graft charges, and a sizable chunk of Macron's followers would probably rally to Le Pen's cause if she were to face leftist Jean-Luc Mélenchon in the final round, according to Gave. He sees only Fillon with a chance to defeat Le Pen in the run-off.

If she emerges victorious, the euro would tank as markets would price in the prospect of its dissolution, rather than focus on Le Pen's legislative hurdles to exit the single-currency bloc. French and Italian bonds will be "unquotable" given vanishing bids, and the European banking system would be beset by seismic turmoil, he said.

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iehi-feed-62115 Fri, 21 Apr 2017 14:54:27 GMT Only China Can "Fix" Venezuela http://implode-explode.com/viewnews/2017-04-21_OnlyChinaCanFixVenezuela.html iehi-feed-62112 Thu, 20 Apr 2017 20:30:07 GMT 40% of Spanish children live in poverty; Many developed countries see increases since 2008 http://implode-explode.com/viewnews/2017-04-20_40ofSpanishchildrenliveinpovertyManydevelopedcountriesseeincreas.html Child poverty increased in most developed countries between 2008 and 2014, according to the report, and by two thirds in European countries.

This increase topped 15 percentage points in Cyprus, Iceland and Greece and was between seven and nine points in Hungary, Italy, Ireland and Spain.

No European country increased its spending on families, while two thirds even cut per capita spending. On the other hand, pensioners tended to see an increase in the amount of money they received between 2010 and 2013.

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iehi-feed-62111 Thu, 20 Apr 2017 17:44:49 GMT Ontario Set to Unveil Its Plan to Cool Toronto Housing http://implode-explode.com/viewnews/2017-04-20_OntarioSettoUnveilItsPlantoCoolTorontoHousing.html Ontario is expected to impose a tax on "non-resident speculators" when it announces new measures Thursday to cool the red-hot housing market in Toronto, according to people familiar with the plans.

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Ontario Premier Kathleen Wynne, Finance Minister Charles Sousa and Housing Minister Chris Ballard are scheduled to make an announcement at 9 a.m. The Globe and Mail reported Thursday, without saying where it got the information, that the tax rate could be 15 percent and that rent control will be expanded to buildings constructed after 1991.

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iehi-feed-62110 Thu, 20 Apr 2017 16:09:17 GMT Venezuela explodes into anti-government protests http://implode-explode.com/viewnews/2017-04-20_Venezuelaexplodesintoantigovernmentprotests.html Venezuela has been rocked by intermittent but violent protests since the Supreme Court dissolved an opposition-led parliament last month. The move was reversed days later, but demonstrations had already erupted.

Further fueling the protests: The government banned opposition leader Henrique Capriles from all political activity for 15 years on April 7.

The turmoil is set against an economic crisis in which unemployment is set to surpass 25%, and people have struggled for years with food and medical shortages and skyrocketing prices.

The economic crunch took another turn this week as the government seized a General Motors plant, prompting the auto giant to say it was halting operations in Venezuela.

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iehi-feed-62109 Thu, 20 Apr 2017 15:36:15 GMT Japan's middle-aged 'parasite singles' face uncertain future http://implode-explode.com/viewnews/2017-04-20_Japansmiddleagedparasitesinglesfaceuncertainfuture.html Some 4.5 million Japanese aged between 35 and 54 were living with their parents in 2016, according to a researcher at the Statistical Research and Training Institute on a demographic phenomena that emerged two decades ago, when youthful singles made headlines for mooching off parents to lead carefree lives.

Now, without pensions or savings of their own, these middle-aged stay-at-homes threaten to place an extra burden on a social welfare system that is already creaking under pressure from Japan's aging population and shrinking workforce.

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And since about 20 percent of the middle-aged stay-at-home singles rely on parents for support, they also threaten to weigh on social safety nets. "Once they use up inherited assets and savings, when nothing is left, they will go on the dole," Yamada said.

The rise in those shunning marriage, experts say, is due not only to more diverse lifestyles but to an increase in low-paying, unstable jobs. Part-timers, temps or contract workers now account for nearly 40 percent of the workforce compared to about 20 percent in the 1980s.

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iehi-feed-62107 Thu, 20 Apr 2017 15:19:05 GMT Reflation trades of 2016 deflate with remarkable speed http://implode-explode.com/viewnews/2017-04-20_Reflationtradesof2016deflatewithremarkablespeed.html Stocks, bond yields and the dollar are all falling, yield curves are flattening and sterling is marching higher. The "reflation" trades of 2016 that were supposed to mark a turning point in global markets are fading... it is now unraveling, in large part due to a clear slowdown in U.S. growth and signs that global inflation is leveling off.

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What is clear is that much of the conviction with which investors went into 2017 has been lost. This week, Goldman Sachs ditched its long-standing bullish call on the U.S. dollar, and Deutsche Bank did likewise with their gloomy sterling outlook.

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iehi-feed-62106 Thu, 20 Apr 2017 15:17:06 GMT IMF Declares Austerity "Over" http://implode-explode.com/viewnews/2017-04-20_IMFDeclaresAusterityOver.html ``"Advanced economies eased their fiscal stance by one-fifth of 1pc of GDP in 2016, breaking a five-year trend of gradual fiscal consolidation," said the IMF in its fiscal monitor.

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Although extra spending may be welcomed by those who want funds for specific projects or public services, the IMF is worried that governments are still heavily indebted and need to be careful with their budgets.

The US government, for instance, should use the current economic growth spurt as a chance to get its finances under control.

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That contrasts heavily with President Donald Trump's plans to spend more on infrastructure and defence while cutting taxes, a combination that risks ramping up the budget deficit.

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iehi-feed-62105 Thu, 20 Apr 2017 02:42:38 GMT Talks of Wider Punitive Taxes Grow As Impact of B.C.'s foreign buyer tax wanes http://implode-explode.com/viewnews/2017-04-19_TalksofWiderPunitiveTaxesGrowAsImpactofBCsforeignbuyertaxwanes.html iehi-feed-62102 Thu, 20 Apr 2017 02:37:34 GMT Gold's found a new pocket of opportunity http://implode-explode.com/viewnews/2017-04-19_Goldsfoundanewpocketofopportunity.html iehi-feed-62099 Wed, 19 Apr 2017 17:20:35 GMT At Kushners' Manhattan Tower, Debt Payments and Losses Increase http://implode-explode.com/viewnews/2017-04-19_AtKushnersManhattanTowerDebtPaymentsandLossesIncrease.html At 666 Fifth Ave., losses totaled $14.5 million after accounting for loan payments, from about $10 million in 2015, figures filed by LNR Partners show. Net operating income for the period grew 2.7 percent from the prior year to $41.3 million, while debt payments rose 11 percent to $55.8 million. Occupancy at the tower jumped to 80 percent at the end of 2016, a gain from 70 percent in September, the documents show....

[Jared] Kushner has divested his interest in the tower to family to prevent conflicts of interest with his government role. His father, Charles Kushner, has searched for partners to convert it into a luxury residential property. China's Anbang Insurance Group Co. had been in advanced talks to team up on a redevelopment of the building. Those discussions ended in late March.

...Repayment terms for more than $1.2 billion of debt on the Midtown property are growing more punitive as a 2019 due date draws near, Bloomberg reported last month. Kushner, now a senior adviser to the president, broke price records when he purchased 666 Fifth for his family firm, Kushner Cos., in 2007.

This article has more on the discussions with the Chinese company breaking off; an excerpt:

A deal with the Chinese company, the Anbang Insurance Group, which has ties to the highest echelons of the Chinese Communist Party, would have bound together two politically connected companies. It had become the subject of enormous media attention and had drawn scrutiny from Democratic lawmakers in Washington.

The speculation surrounding the deal became a distraction that led both companies to abandon the negotiations, according to a spokesman for Kushner Companies.

How could they even think that was "OK" to try in the first place??

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iehi-feed-62095 Tue, 18 Apr 2017 13:58:11 GMT Will Trump Flip-flop on the TPP Too? http://implode-explode.com/viewnews/2017-04-18_WillTrumpFlipflopontheTPPToo.html Trade is expected to top the agenda when Vice President Mike Pence holds talks with Japanese Deputy Prime Minister Taro Aso in Tokyo on Tuesday as part of a 10-day Asia tour. Pence is expected to focus on the prospect of a U.S.-Japan free trade agreement (FTA), but Tokyo may not be interested.

"We [the U.S.] are trying to offer them a poor man's TPP with this FTA idea, but I don't think Japan has any interest in pursuing that. They want to stick with ideas and principles that were hammered out in TPP," said King, specifically referring to intellectual property rights as well as market access.

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iehi-feed-62094 Mon, 17 Apr 2017 23:11:35 GMT Canada's Housing Bubble Could Be Next Financial Market Trigger http://implode-explode.com/viewnews/2017-04-17_CanadasHousingBubbleCouldBeNextFinancialMarketTrigger.html