Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-60772 Thu, 29 Sep 2016 19:58:55 GMT Deutsche Bank under pressure as hedge funds cut exposure http://implode-explode.com/viewnews/2016-09-29_DeutscheBankunderpressureashedgefundscutexposure.html Deutsche Bank came under mounting pressure this evening after it emerged that some hedge funds worried about its financial health had started to trim their exposure to the troubled lender, sparking fresh fears about its future.  

About 10 funds that use Deutsche's prime brokerage business -- a division that services hedge funds - are believed to have reduced their positions with the bank in recent days by shifting some of their derivatives holdings to different firms and withdrawing some cash.

See also Martin Armstrong's comments.

]]>
iehi-feed-60771 Thu, 29 Sep 2016 18:42:20 GMT Bank Of England Governor Warns Of ZIRP/QE "In Perpetuity" http://implode-explode.com/viewnews/2016-09-29_BankOfEnglandGovernorWarnsOfZIRPQEInPerpetuity.html iehi-feed-60770 Thu, 29 Sep 2016 02:40:53 GMT In U-Turn Shocker, Saudis Choose Higher Prices Over Free Oil Markets http://implode-explode.com/viewnews/2016-09-28_InUTurnShockerSaudisChooseHigherPricesOverFreeOilMarkets.html ``The decision at this week's meeting of the Organization of Petroleum Exporting Countries in Algiers to cut production was necessitated by Saudi Arabia's tattered finances. The kingdom has the highest budget deficit among the world's 20 biggest economies, it's enduring a delay in its first international bond issue and now faces fresh legal uncertainty as the U.S. Congress voted Wednesday to allow Americans to sue the country for its involvement in 9/11.''

Inquiring minds wonder if this abrupt about-face is actually in direct response to/retaliation for the 9/11 liability legislation. Those who predicted that the legislation might herald the death of the petrodollar certainly have a giant factual point in their favor already, after a mere few hours.

]]>
iehi-feed-60769 Thu, 29 Sep 2016 01:41:27 GMT Housing Bubble? Here's why I dumped my last US property http://implode-explode.com/viewnews/2016-09-28_HousingBubbleHereswhyIdumpedmylastUSproperty.html Hockey stick charts make me want to sell immediately. They're screaming indicators that we're entering another housing bubble. It's not just Dallas; home prices across the United States are at or near their all-time highs, eclipsing the previous peak set a decade ago.

...

In fact, in the Dallas market, the ratio of home prices to income actually exceeds the level it was at during the previous housing boom. So, relative to income levels, home prices are becoming EXTREMELY expensive. This means that home prices are passing their all-time highs on both a relative AND absolute basis.

]]>
iehi-feed-60765 Wed, 28 Sep 2016 17:18:16 GMT Draghi rejects German criticism, calls on Berlin carry its weight http://implode-explode.com/viewnews/2016-09-28_DraghirejectsGermancriticismcallsonBerlincarryitsweight.html iehi-feed-60763 Wed, 28 Sep 2016 16:32:38 GMT Senate Set to Override Obama Veto of Saudi 9/11 Lawsuit Bill http://implode-explode.com/viewnews/2016-09-28_SenateSettoOverrideObamaVetoofSaudi911LawsuitBill.html iehi-feed-60762 Wed, 28 Sep 2016 16:05:43 GMT German financial watchdog not working on emergency plan for Deutsche Bank http://implode-explode.com/viewnews/2016-09-28_GermanfinancialwatchdognotworkingonemergencyplanforDeutscheBank.html iehi-feed-60757 Wed, 28 Sep 2016 01:30:40 GMT Roach: US and Japanese central bankers are in denial over the signs of an impending meltdown http://implode-explode.com/viewnews/2016-09-27_RoachUSandJapanesecentralbankersareindenialoverthesignsofanimpen.html iehi-feed-60756 Tue, 27 Sep 2016 23:55:14 GMT Bank of Japan Confesses: Even We Don't Trust the Bank of Japan http://implode-explode.com/viewnews/2016-09-27_BankofJapanConfessesEvenWeDontTrusttheBankofJapan.html ``If a central bank without credibility makes a credible promise to run a non-credible policy, do the double negatives cancel out and create credibility?

...

But the question is a serious one. The BOJ has just admitted, in effect, that it has a credibility problem, even as it sets about trying to promise that it will deliberately act to damage its credibility. Its admission, couched in layers of economic jargon, underscores the worries at many other central banks that years of low inflation could become self-perpetuating.

... Put simply, long-run inflation expectations depend in large part on where inflation has been, not on the 2% target the BOJ sets for it to be in future.

... "The Bank has attempted to make expectations formation more forward-looking by pursuing QQE [quantitative and qualitative easing] with the aim of anchoring inflation expectations at the price stability target of 2%," the BOJ said last week. "However, in the course of this attempt, the observed inflation rate declined due to a variety of factors such as the substantial fall in crude oil prices, and inflation expectations--reflecting their adaptive manner--followed suit."

Translated from central bank-speak, "it wasn't our fault, but we failed."

...

The BOJ has also taken on an idea from Paul Krugman, a past winner of the Nobel memorial prize in economics: It wants to be credibly irresponsible. It promised on Wednesday to keep printing money until it overshoots the inflation target and stays above, in an effort to make people believe it is willing to run a looser policy in the long run than it really should. If they believed that, inflation expectations should rise faster, and inflation follow suit.

The problem is that if the target isn't believed in the first place, who is likely to believe the BOJ will go even further?

]]>
iehi-feed-60755 Tue, 27 Sep 2016 23:53:32 GMT WTO Slashes Global Trade Forecast by 39% Since April: "Wake-Up Call" Says WTO Director http://implode-explode.com/viewnews/2016-09-27_WTOSlashesGlobalTradeForecastby39SinceAprilWakeUpCallSaysWTODire.html The new figure of 1.7 percent, down from the WTO's previous estimate of 2.8 percent in April, marked the first time in 15 years that international commerce was expected to lag the growth of the world economy, the trade body said.

...

"We need to make sure that this does not translate into misguided policies that could make the situation much worse, not only from the perspective of trade but also for job creation and economic growth and development which are so closely linked to an open trading system," the report quoted him as saying.

The data underlined concerns that, after a long period of growth through globalization and reliance on global trade, governments are increasingly seeking to protect their own industries and promote domestic producers at the expense of foreign competitors.

]]>
iehi-feed-60754 Tue, 27 Sep 2016 23:41:15 GMT Phantasmagoria http://implode-explode.com/viewnews/2016-09-27_Phantasmagoria.html iehi-feed-60753 Tue, 27 Sep 2016 23:10:28 GMT Don't ignore tsunami from South China Sea http://implode-explode.com/viewnews/2016-09-27_DontignoretsunamifromSouthChinaSea.html iehi-feed-60751 Tue, 27 Sep 2016 19:49:45 GMT Ford Fights Back Against Trump Debate Claims http://implode-explode.com/viewnews/2016-09-27_FordFightsBackAgainstTrumpDebateClaims.html Ford Motor Co. went on the defensive following the latest attacks from Donald Trump aimed at the auto maker's big-dollar Mexico investments and production plans.

Mr. Trump has for most of his campaign used Ford's Mexico investment as a key pillar in his attacks of the North American Free Trade Agreement and as a way to highlight the decline of the U.S. manufacturing base. While Ford has been touting its plan to invest $1.6 billion in new Mexican production capacity, it has only recently taken Mr. Trump on directly. Its recent response included a round of television interviews and other media engagements conducted by Chief Executive Mark Fields.

Employees of the Dearborn, Mich., company, including high-ranking engineers, took to social media platforms--including Facebook and Twitter--with statistics that defend the company's reputation as an American company during and after Monday's presidential debate. A graphic that some employees sent out claims Ford invested $12 billion in U.S. plants and "created nearly" 28,000 jobs in the past five years. Others circulated stories written by Detroit media outlets highlighting Ford's contributions to the U.S. manufacturing sector.

...

Ford employees and executives have recently pointed out the company will back-fill small car production in Michigan with higher-profit SUVs and pickup trucks. But the company has been slow to outline specific product plans as it continues to negotiate with union officials, and state and local officials on tax breaks and labor terms.

The company said it is currently hiring 488 professionals.

]]>
iehi-feed-60750 Tue, 27 Sep 2016 15:49:24 GMT Donald Trump's economic plan is still god awful http://implode-explode.com/viewnews/2016-09-27_DonaldTrumpseconomicplanisstillgodawful.html iehi-feed-60749 Tue, 27 Sep 2016 03:15:42 GMT Fact-Checking the First Presidential Debate http://implode-explode.com/viewnews/2016-09-26_FactCheckingtheFirstPresidentialDebate.html iehi-feed-60748 Mon, 26 Sep 2016 18:24:39 GMT Renminbi use surges in London in spite of Brexit http://implode-explode.com/viewnews/2016-09-26_RenminbiusesurgesinLondoninspiteofBrexit.html The new figures, reflecting bilateral business confidence and the renminbi's growing international use, showed London's renminbi-denominated business transactions in August were 60 percent higher than July's.

...

[China Construction Bank] London celebrated the significant milestone of clearing 10 trillion yuan ($1.5 trillion) of transactions between June 2014, when it was appointed by PBOC to be London's official renminbi clearing bank, and August 2016.

]]>
iehi-feed-60743 Mon, 26 Sep 2016 14:27:34 GMT A Weaker Currency Is No Longer Economic Elixir It Once Was http://implode-explode.com/viewnews/2016-09-26_AWeakerCurrencyIsNoLongerEconomicElixirItOnceWas.html Just look at Japan, where the yen plunged 28 percent in the two years through 2014, yet net exports to America still fell by 10 percent. Or at the U.K., where the pound's 19 percent tumble in the two years through 2009 couldn't stave off a 26 percent decline in shipments to the U.S. In fact, since the turn of the century, the ability of exchange-rate movements to affect trade and growth in major economies has fallen by more than half, according to Goldman Sachs Group Inc.

The findings suggest that weaker currencies may not provide much assistance to officials in countries like Japan and the U.K. that are relying on unprecedented easy-money policies to help boost tenuous growth and inflation. On the flip side, the data also indicate that concerns the U.S. recovery will be derailed as rising interest rates drive investors into the dollar are also overblown. A shift in the structure of advanced-economy trade to less price-elastic goods and services, combined with the prolonged effects of the financial crisis, have stunted the sensitivity of trade volumes relative to global exchange rates, according to Goldman Sachs analysts led by Jari Stehn.

]]>
iehi-feed-60742 Mon, 26 Sep 2016 14:25:36 GMT China launches $52.5 billion fund to restructure state enterprises http://implode-explode.com/viewnews/2016-09-26_Chinalaunches525billionfundtorestructurestateenterprises.html iehi-feed-60741 Mon, 26 Sep 2016 14:23:44 GMT Cracks showing in Germany's fragile truce with the ECB http://implode-explode.com/viewnews/2016-09-26_CracksshowinginGermanysfragiletrucewiththeECB.html "The big challenge for Mario Draghi will be to prepare the Bundestag and German public for a further easing of monetary policy," said Marcel Fratzscher, head of the DIW economic institute and a former senior official at the ECB.

That message is unlikely to go down well in Berlin. In addition to concerns about the distorting effects of QE on financial markets and the impact of low interest rates on German savers and insurers, the political landscape in Germany has become decidedly more toxic for the ECB over the past months.

With one year to go until the next federal election, the AfD has risen to a record high of 16 percent in national polls. On the defensive, Merkel's conservatives are desperate to shift the debate away from her increasingly unpopular stance on refugees.

]]>
iehi-feed-60739 Mon, 26 Sep 2016 14:19:20 GMT Economic Establishment Pans Trump Economic Plan http://implode-explode.com/viewnews/2016-09-26_EconomicEstablishmentPansTrumpEconomicPlan.html Establishment economists ranging from austere neoliberals to spendthrift Keynesians are united in branding Donald Trump's proposed economic policies as "disastrous."

...

Trump's tax policies may well benefit very high-income households, but as Betsy McCaughey notes in the New York Post this week, they also reduce the federal income-tax rate for couples earning $50,000 or less to zero, and that tax-free threshold goes up if you add new child care tax deductions... the proposal to cut corporate income taxes to 15% from the current 35% is the "heart" of Trump's economic plan, and will do the most to repatriate production and encourage the business investment that will spur growth.

...

And conservative analyst James Pethokoukis, a fellow at the American Enterprise Institute, labeled Trump's economic plan "a complete and utter joke" as he took the Republican nominee to task for potentially adding $2.6 trillion to $3.9 trillion to the national debt over the next 10 years -- even though the $9 trillion in debt added during the seven and a half years of the Obama administration has caused no detectable harm.

]]>