Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-62311 Fri, 26 May 2017 16:24:18 GMT Donald Trump and NATO: Why His Silence on Article 5 Is a Big Deal http://implode-explode.com/viewnews/2017-05-26_DonaldTrumpandNATOWhyHisSilenceonArticle5IsaBigDeal.html iehi-feed-62310 Fri, 26 May 2017 16:18:24 GMT It's time to plan an escape route, for you and your money, from Trumpland http://implode-explode.com/viewnews/2017-05-26_ItstimetoplananescaperouteforyouandyourmoneyfromTrumpland.html iehi-feed-62309 Fri, 26 May 2017 16:12:51 GMT Japan, South Korea drive global bitcoin prices as retail investor pile in http://implode-explode.com/viewnews/2017-05-26_JapanSouthKoreadriveglobalbitcoinpricesasretailinvestorpilein.html Japanese and South Korean buying helped drive the price of bitcoin to an all-time high this week, with the digital currency more than doubling its value since the start of the year, analysts and market practitioners said on Friday.

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In Japan and South Korea, among the largest markets for bitcoin globally, bitcoin traded at a premium of more than $300 higher above the global average, according to CryptoCompare.com.

The rally appeared to have been driven by new buying from smaller retail investors, suggesting bitcoins are increasingly viewed among the general investing public as an alternative asset class much like gold, analysts said.

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iehi-feed-62307 Fri, 26 May 2017 14:56:06 GMT Romer Sidelined at World Bank as Establishment Economists Bristle at Reform http://implode-explode.com/viewnews/2017-05-26_RomerSidelinedatWorldBankasEstablishmentEconomistsBristleatRefor.html Romer pioneered research into "endogenous growth," examining how the diffusion of knowledge boosts output. His name often comes up in short lists for the Nobel Prize in economics.

... But in recent years, his attacks on the credibility of macroeconomic models irritated many of his peers. His combativeness didn't endear him to some of the more than 600 economists who work in DEC, according to people familiar with the matter.

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But researchers didn't like the curt way Romer often conveyed his message, said two people familiar with the matter. Staff were upset by what they saw as his abrasive emails, and they didn't feel Romer listened to their concerns, these people said. Researchers were flummoxed by some of his stylistic hangups, including a distaste for the conjunction "and."

Romer was frustrated with what some see as the dense, convoluted style of many of the department's reports. He pushed researchers to write more clearly, using the active voice to be more direct.

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A study by Stanford University's Literary Lab in 2015 found the bank's use of language has become more "codified, self-referential, and detached from everyday language" since the bank's board of governors held their inaugural meeting in 1946. The study coined the term "Bankspeak," a vague "technical code" that symbolized the lender's organizational drift.

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iehi-feed-62306 Fri, 26 May 2017 14:51:30 GMT Not a little list: EU draws up Brexit bill http://implode-explode.com/viewnews/2017-05-26_NotalittlelistEUdrawsupBrexitbill.html iehi-feed-62304 Fri, 26 May 2017 14:18:50 GMT The investigation of Jared Kushner fits a very troubling pattern http://implode-explode.com/viewnews/2017-05-26_TheinvestigationofJaredKushnerfitsaverytroublingpattern.html iehi-feed-62302 Thu, 25 May 2017 22:53:51 GMT Paul Manafort's Lucrative Ukraine Years Are Central to the Russia Probe http://implode-explode.com/viewnews/2017-05-25_PaulManafortsLucrativeUkraineYearsAreCentraltotheRussiaProbe.html Until recently, Manafort had receded into the background as the uproar over Trump's firing of his national security adviser, Michael Flynn, and then the FBI director, James Comey, began to shake the White House.

But the Manafort story--a tale of pro-Russia players, political tradecraft and cunning financial maneuvers--has never gone away. The reason, in a word, is money. Manafort, who less than a year ago was playing a central role in the Trump campaign, made millions of dollars over a decade promoting Kremlin-friendly interests in Ukraine and beyond. No other Trump associate has profited as handsomely from ties to Russia-linked businessmen and politicians.

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Ukrainian prosecutors are investigating what they call a "criminal organization" set up by Yanukovych via bribes and theft of state assets before he fled to Moscow after the killing of more than 100 protesters in 2014, and they are looking at what role Manafort may have played in the suspected scheme. They've repeatedly asked the FBI for help to question Manafort as part of their inquiry into a New York law firm in connection to a report that largely defended the Tymoshenko prosecution.

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In the five-year period from 2007 to 2012, Manafort was paid at least $12.7 million, according to a handwritten Party of Regions ledger found later in its head office. Ukraine's anti-corruption bureau and the FBI are investigating whether the ledger reflected any illegal payments to Manafort and to others. Manafort's spokesman says that after being paid he had many expenses and so the payment figure does not represent profit. One payment to Manafort on the ledger matches an invoice he signed in 2009 to sell $750,000 of computers to a Belize-registered company called Neocom Systems Ltd., according to documents obtained by Leshchenko from Manafort's Kiev office.

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Even after Russia annexed Crimea in 2014 and Yanukovych fled to Russia, Manafort returned to Ukraine 17 times, earning at least $1 million to help reelect pro-Russia politicians, according to a party official who worked with him. Manafort's spokesman declined to comment on that payment.

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While working in Ukraine, Manafort earned millions from a side private equity fund with Deripaska, according to a lawsuit by Deripaska, who is suing Manafort in the Cayman Islands over the soured business partnership. Deripaska declined to comment.

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"He was going for visceral issues and an emotional reaction," says Kateryna Yushchenko, the American-born wife of former President Viktor Yushchenko and a onetime State Department and White House official. "When I confronted his people about it, they said, ‘That's politics.' I said this isn't like gun rights or abortion. Here it could lead to war."

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Within months of his victory, Yanukovych ordered criminal investigations into Tymoshenko, culminating in a sentence of seven years in jail. Condemned around the world, her prosecution would become a flashpoint in negotiations between Ukraine and the European Union on an association agreement.

Manafort was closely involved in recruiting the firm of Skadden Arps Slate Meagher & Flom LLC on behalf of the Ukrainian Justice Ministry to write a lengthy report on Tymoshenko's prosecution. He met with Justice Minister Oleksandr Lavrynovych to go over the contract with Skadden and emailed with Skadden partner Greg Craig, according to documents uncovered by Ukrainian prosecutors. The ministry agreed to pay Skadden a mere $12,000, just below the threshold requiring it to go to a public tender. But much more money was to come to Skadden.

Prosecutors believe Manafort drew up a six-page media strategy plan with FTI Consulting on how to use the Skadden report, based on documents they have examined. The report, released at the end of 2012, criticized some aspects of the case but concluded that the evidence supported her conviction and that her due process rights hadn't been violated. After the document's release, Skadden signed a new contract with the ministry in 2013 that envisaged "additional work" and paid the firm $1 million, the prosecutors say, noting that no additional work was done. FTI declined to comment.

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iehi-feed-62301 Thu, 25 May 2017 22:21:11 GMT For China Now, the Only Question Is the Size of the Bill http://implode-explode.com/viewnews/2017-05-25_ForChinaNowtheOnlyQuestionIstheSizeoftheBill.html iehi-feed-62300 Thu, 25 May 2017 17:11:36 GMT Travel To US Has Tumbled 16% Since Trump Took Office, Foursquare Says http://implode-explode.com/viewnews/2017-05-25_TravelToUSHasTumbled16SinceTrumpTookOfficeFoursquareSays.html iehi-feed-62298 Thu, 25 May 2017 17:01:10 GMT OPEC, non-OPEC extend oil output cut by nine months to fight glut http://implode-explode.com/viewnews/2017-05-25_OPECnonOPECextendoiloutputcutbyninemonthstofightglut.html OPEC and non-members led by Russia decided on Thursday to extend cuts in oil output by nine months to March 2018 as they battle a global glut of crude after seeing prices halve and revenues drop sharply in the past three years.

OPEC's cuts have helped to push oil back above $50 a barrel this year, giving a fiscal boost to producers, many of which rely heavily on energy revenues and have had to burn through foreign-currency reserves to plug holes in their budgets...

The price rise this year has spurred growth in the U.S. shale industry, which is not participating in the output deal, thus slowing the market's rebalancing with global crude stocks still near record highs.

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iehi-feed-62294 Thu, 25 May 2017 14:26:16 GMT China "National Team" Rescues Stocks As Downgrade Crushes Commodities http://implode-explode.com/viewnews/2017-05-25_ChinaNationalTeamRescuesStocksAsDowngradeCrushesCommodities.html iehi-feed-62292 Thu, 25 May 2017 14:19:17 GMT China's Rating Cut Exposes Firms Hooked on Dollar Borrowing http://implode-explode.com/viewnews/2017-05-25_ChinasRatingCutExposesFirmsHookedonDollarBorrowing.html While Chinese companies' foreign-currency debt is only a fraction of the $9 trillion local bond market, China Inc. is on pace for record dollar bond sales this year after the authorities' crackdown on financial leverage drove up borrowing costs at home. Overseas borrowing has also been part of the government's strategy to encourage capital inflows in a bid to ease the depreciation pressure on the yuan.

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Moody's lowered China's rating to A1 from Aa3 on Wednesday, citing a worsening debt outlook. Moody's also downgraded the ratings of 26 non-financial corporate and infrastructure government-related issuers by one level. China's Finance Ministry blasted the move as "absolutely groundless," saying the ratings company has underestimated the capability of the government to deepen reform and boost demand.

"The economy is dependent on policy stimulus and with that comes higher leverage," Marie Diron, associate managing director, Moody's Sovereign Risk Group, said on Bloomberg Television after the announcement. "Corporate debt is really the big part."

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iehi-feed-62288 Tue, 23 May 2017 18:37:55 GMT US attack on North Korea is imminent, George Friedman says http://implode-explode.com/viewnews/2017-05-23_USattackonNorthKoreaisimminentGeorgeFriedmansays.html ``Speaking Monday to a rapt audience at the 2017 Strategic Investment Conference in Orlando, Friedman said that while it is unlikely the US will take action before President Trump returns home at the weekend, North Korea's actions appear to have "offered the US no alternative" to a clash.

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Pointedly branding the North Korean elites "neither crazy nor stupid," Friedman said they have "homicidal, but not suicidal tendencies." "We are facing a war that is not simple," he said, adding that Russia and China are both washing their hands of the matter.

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"There is no other power that can conceivably--and I include the Chinese in this--take effective military action against the North Koreans to stop a nuclear program," he continued. "That means it's either the US [takes action], or North Korea has a nuclear weapon."

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Rumors of the demise of America's hegemonic status are greatly exaggerated, according to Friedman. A consequence of its unparalleled power is that it will continue to "be involved in all sorts of miserable wars every 5--10 years. It's partly because no one else wants to do it and partly because we can afford to and partly because of long-term threats."

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iehi-feed-62284 Tue, 23 May 2017 04:29:50 GMT Commodity Traders Have a Really Big Problem http://implode-explode.com/viewnews/2017-05-23_CommodityTradersHaveaReallyBigProblem.html Unlike the stock market in which transactions are typically based on information that's public, firms that buy and sell raw materials thrived for decades in an opaque world where their metier relied on knowledge privy only to a few. Now, technological development, expanding sources of data, more sophisticated producers and consumers as well as transparency surrounding deals are eroding their advantage.

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As market participants' access to information increases, the traders highlighted the need to more than simply buy and sell commodities as profits from arbitrage -- or gains made from a differential in prices -- shrinks. That means getting involved in the supply chain by potentially buying into infrastructure that's key to the production and distribution of raw materials, and also providing financing for the development of such assets.

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iehi-feed-62283 Mon, 22 May 2017 17:01:45 GMT Indian solar power prices hit record low, undercutting fossil fuels http://implode-explode.com/viewnews/2017-05-22_Indiansolarpowerpriceshitrecordlowundercuttingfossilfuels.html Wholesale solar power prices have reached another record low in India, faster than analysts predicted and further undercutting the price of fossil fuel-generated power in the country.

The tumbling price of solar energy also increases the likelihood that India will meet -- and by its own predictions, exceed -- the renewable energy targets it set at the Paris climate accords in December 2015.

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At a reverse auction in Rajasthan on Tuesday, power companies Phelan Energy and Avaada Power each offered to charge 2.62 rupees per kilowatt-hour (kWh) of electricity generated from solar panels they hope to build at an energy park in the desert state. Last year's previous record lowest bid was 4.34 rupees per kWh .

Analysts called the 40% price drop "world historic" and said it was driven by cheaper finance and growing investor confidence in India's pledge to dramatically increase its renewable energy capacity.

It reduces the market price of solar tariffs well past the average charged by India's largest thermal coal conglomerate, currently around 3.20 rupees per kWh . Wholesale price bids for wind energy also reached a record low of 3.46 rupees in February.

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iehi-feed-62282 Mon, 22 May 2017 15:16:24 GMT Interest-only loans could be 'Australia's sub-prime' http://implode-explode.com/viewnews/2017-05-22_InterestonlyloanscouldbeAustraliassubprime.html High-risk mortgage loans to young families, professionals and other over-extended borrowers amounting to more than six times household incomes could wipe out 20 per cent of the major banks' equity base, institutional investment fund JCP Investment Partners has warned.

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In a proprietary study of the nation's record high-and-growing household debt mountain, the Melbourne-based fund said Irish-style housing losses for the bigger-than-recognised pool of riskier borrowers could wipe out half of the banks' equity capital.

Interest-only loans, said JCP -- which is one of three Australian equities managers appointed by the Future Fund -- could be "Australia's sub-prime".

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Among the biggest concerns is what may happen when households feel they can no longer service their loans, for instance, as borrowing costs are reset higher or those with interest only mortgages are forced to repay the principal as well.

That creates a negative feedback loop -- experienced by Ireland after the financial crisis -- in which stressed borrowers slash their spending, in turn crunching the economy, driving up unemployment and adding to downward pressure on house prices.

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The fund's senior researchers Matthew Wilson and Craig Shephard found that about half of all the nation's mortgage debt was in the hands of borrowers whose debt was more than four times larger than their gross income.

The same borrowers had paid off less than half of their loans, the team found, based on data from several official and private sector sources that adjusted for changes in incomes and the collateral values of their homes.

The average loan-to-income ratio of these heavily indebted households was 6.4, or more than double the old banking "rule of thumb" that mortgage managers didn't lend more than three times a household's income "unless they were doctors".

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JCP calculated how the banks' balance sheets would handle an 2008 Irish-style loss on the high risk loans. It estimated that 50 per cent of the equity of Australian banks would be destroyed by soured loans to these high-risk borrowers.

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iehi-feed-62281 Mon, 22 May 2017 14:58:37 GMT Car loans, low rates, second mortgages: all the ingredients for a new credit crunch (UK) http://implode-explode.com/viewnews/2017-05-22_Carloanslowratessecondmortgagesalltheingredientsforanewcreditcru.html A credit crunch is brewing and when it happens, the UK is going to get hurt. That is the message emerging from senior executives in the financial services industry, who do not think Britain has changed that much since the 2008 credit disaster and the devastating crash that followed. Three developments lie at the heart of this disturbing analysis: spectacular growth in the sale of second mortgages, car loans and credit cards.

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Officials at the Bank have a growing list of concerns. Not only is there the second mortgage problem and the number of car loans: figures show consumer spending on unsecured credit has also rocketed in the last year. In March alone, the amount UK consumers owed on loans and cards grew by £1.9bn, the highest figure in 11 years.

Households are known to have increased their reliance on short-term unsecured loans to buy cars and furniture, and to kit out new kitchens. Some use them to maintain their lifestyle in the face of a decade of flat wages. Unfortunately, another group use credit to pay the monthly rent.

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Try as they might, the UK's two big high street lenders cannot put the financial crisis behind them. Last week, when Lloyds Banking Group was congratulating itself over its return to the private sector, it was still being haunted by the fraud perpetrated at the Reading branch of HBOS, the hotshot lender it rescued in 2008. To add to the pressure, Noel Edmonds, the TV celebrity, is leading the campaign for compensation for the victims of the fraud which took place in the run-up to the financial crisis.

This week, Royal Bank of Scotland will be transported back to those calamitous days of 2008. A high court judge will begin hearing a claim for compensation from investors who backed a £12bn cash call by RBS in April 2008 -- only for the Edinburgh-based institution to be bailed out by taxpayers six months later.

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iehi-feed-62280 Mon, 22 May 2017 14:33:18 GMT The Wild West of Deep-Sea Mining http://implode-explode.com/viewnews/2017-05-22_TheWildWestofDeepSeaMining.html iehi-feed-62278 Sun, 21 May 2017 18:07:08 GMT Trump's weapons deal ratifies US support for Yemen war http://implode-explode.com/viewnews/2017-05-21_TrumpsweaponsdealratifiesUSsupportforYemenwar.html Saudi Arabia, armed with American weapons, fought a proxy war with Iran in Yemen, where the government was overthrown by a rebel group tied to the Iranians. Allegations that Saudi Arabia has bombed civilians and committed other human rights abuses compromised what would otherwise tend to be unanimous U.S. support for the conflict. A $1.15 billion arms deal last year turned controversial, but that pact is dwarfed by the $110 billion pact signed Saturday.

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Sen. Todd Young, R-Ind., wanted Tillerson to make a series of demands on the Saudis designed to ease civilian suffering in Yemen, such as ending delays on humanitarian aid at a port city held by the rebels.

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Instead, Tillerson's counterpart rebuffed any charges of humanitarian abuses, denying that the Saudis carried out airstrikes against civilians and blaming the rebels for humanitarian aid delays at the port.

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iehi-feed-62276 Sun, 21 May 2017 17:59:45 GMT U.K. Threatens to Quit Brexit Talks If It Faces Massive Bill http://implode-explode.com/viewnews/2017-05-21_UKThreatenstoQuitBrexitTalksIfItFacesMassiveBill.html The U.K. will quit talks on leaving the European Union unless the bloc drops its demands for a divorce payment as high as 100 billion euros ($112 billion), Brexit Secretary David Davis said.

Britain's negotiations would otherwise be plunged into "chaos," and even a 1 billion-pound settlement would be "a lot of money," Davis said in an interview published in the Sunday Times.

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Davis also said the negotiations, which are expected to begin on June 19, will be "fairly turbulent" and that he would reject any blueprint for discussions that requires the issues of the divorce bill, EU citizens' rights and Northern Ireland's border to be solved before talks can begin on future trade.

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