Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-63894 Wed, 25 Apr 2018 14:13:54 GMT Mulvaney: CFPB doesn't have to run a ‘Yelp' for bank customers http://implode-explode.com/viewnews/2018-04-25_MulvaneyCFPBdoesnthavetorunaYelpforbankcustomers.html Consumer Financial Protection Bureau acting director Mick Mulvaney told a large crowd of bankers gathered in Washington that he doesn't have to run a "Yelp for financial services, sponsored by the federal government."

Mulvaney's remark, delivered to the American Bankers Association, got lots of chuckles and then huge applause when he added that, in particular, he doesn't see anything in the Dodd-Frank law that created the CFPB that requires "the Bureau," as he prefers to call the agency, to make a database of complaints against the banks available to the public.

Advocates consider the database an invaluable resource in determining the difficulties consumers face when dealing with banks and other financial service providers. Industry critics say the database is a tabulation of unverified and possibly untrue complaints.

That was just one of several crowd-pleasing remarks by Mulvaney, who does double duty as director of the Office of Management and Budget, a cabinet-level position [possibly illegally.]

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iehi-feed-63891 Tue, 24 Apr 2018 00:44:24 GMT Tax Changes Mean Mortgage-Interest Deduction To Find Fewer Takers http://implode-explode.com/viewnews/2018-04-23_TaxChangesMeanMortgageInterestDeductionToFindFewerTakers.html The resulting home mortgage-interest deduction -- once considered a tax break too sacred to touch -- will be used by just 13.8 million taxpayers, down 57%. In 2017, about 12.4% of the tax break went to households with incomes exceeding $500,000, and 36.5% of the benefit went to people earning between $100,000 and $200,000.

Now, 23.9% of the shrunken mortgage-interest deduction is projected to go to households making more than $500,000 with 28.9% of the benefit going to households between $100,000 and $200,000.

Other changes in policy also curb the mortgage-interest deduction, including the cut in marginal tax rates, which reduces the value of every deduction. Homeowners can now deduct interest on up to $750,000 in loans, down from $1m...

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iehi-feed-63888 Sun, 22 Apr 2018 17:07:52 GMT The Pension Time Bomb, $400 Trillion by 2050 http://implode-explode.com/viewnews/2018-04-22_ThePensionTimeBomb400Trillionby2050.html According to an analysis by the World Economic Forum (WEF), there was a combined retirement savings gap in excess of $70 trillion in 2015, spread between eight major economies..

The WEF says the deficit is growing by $28 billion every 24 hours -- and if nothing is done to slow the growth rate, the deficit will reach $400 trillion by 2050, or about five times the size of the global economy today.

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This problem is amplified by the size of generations and fertility rates. The population of retirees globally is expected to grow from 1.5 billion to 2.1 billion between 2017-2050, while the number of workers for each retiree is expected to halve from eight to four over the same timeframe.

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iehi-feed-63882 Thu, 19 Apr 2018 00:09:45 GMT World debt hits record $164 trillion as crisis hangover lingers http://implode-explode.com/viewnews/2018-04-18_Worlddebthitsrecord164trillionascrisishangoverlingers.html The world's debt load has ballooned to a record $164 trillion, a trend that could make it harder for countries to respond to the next recession and pay off debts if financing conditions tighten, the International Monetary Fund said.

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The global debt burden clouded the IMF's otherwise upbeat outlook of the world economy, which is in its strongest upswing since 2011. The fund on Tuesday forecast expansion of 3.9 per cent in 2018 and 2019, while saying in subsequent years the global economy could be impacted by tighter monetary policy and the fading effects of U.S. fiscal stimulus.

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The IMF figures bare the scale of the debt hangover from which the world is still recovering from a decade after the financial crisis pushed the global banking system to the brink, and tipped the world economy into recession. Governments increased spending to boost growth, while central banks resorted to unconventional methods to ease financing conditions, such as buying bonds.

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iehi-feed-63880 Wed, 18 Apr 2018 19:30:17 GMT U.S. Debt Load Seen Worse Than Italy's by 2023, IMF Predicts http://implode-explode.com/viewnews/2018-04-18_USDebtLoadSeenWorseThanItalysby2023IMFPredicts.html iehi-feed-63875 Mon, 16 Apr 2018 21:39:38 GMT Hannity-Cohen-Trump: Conflict of Interest in Pro-Trump Media, Much? http://implode-explode.com/viewnews/2018-04-16_HannityCohenTrumpConflictofInterestinProTrumpMediaMuch.html While his off-air relationships might be just a logical extension of Hannity's on-air cheerleading for Trump, it still came as a surprise, immediately raising questions about both Hannity and Fox.

By any standards of any normal newsroom, the Cohen-Hannity relationship is a glaring conflict of interest.

Fox is not a normal newsroom. And Hannity's viewers are not typical news viewers -- people who watch almost any other show would likely feel lied to when they learned something like this had not been disclosed to them, but Hannity's want him to have this kind of relationship with Trumpworld.

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"I never retained him in the traditional sense as retaining a lawyer; I never received an invoice from Michael; I never paid legal fees to Michael, but I have, occasionally, had brief discussions with him about legal questions about which I wanted his input and perspective," Hannity said on the radio.

But even according to Hannity's account, he was taking free legal advice from someone on the president's payroll.

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iehi-feed-63871 Mon, 16 Apr 2018 15:14:50 GMT Japan PM Abe's woes deepen as ratings drop amidst scandals, Koizumi predicts resignation http://implode-explode.com/viewnews/2018-04-16_JapanPMAbeswoesdeepenasratingsdropamidstscandalsKoizumipredictsr.html Japanese Prime Minister Shinzo Abe's political crisis deepened on Monday after polls showed that suspected cronyism scandals have pushed his support to record lows and a popular predecessor said Abe would probably resign in June....

Abe has denied that he had intervened to ensure preferential treatment for the educational institution Kake Gakuen, run by his friend Kotaro Kake, to set up a veterinary school.

He has also repeatedly denied that he or his wife intervened in a heavily discounted sale of state-owned land to another school operator, Moritomo Gakuen, which has ties to his wife.

The Moritomo affair has ensnared the finance ministry, which has admitted officials doctored documents related to the land-sale.

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iehi-feed-63870 Mon, 16 Apr 2018 15:00:51 GMT Legal fees made up more than 20% of Trump's campaign spending so far this year http://implode-explode.com/viewnews/2018-04-16_Legalfeesmadeupmorethan20ofTrumpscampaignspendingsofarthisyear.html More than one-fifth of the $3.9 million that President Donald Trump's 2020 re-election campaign has spent this year has gone to legal fees, the campaign's latest quarterly Federal Election Commission filing shows.

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The steep legal bills come amid a probe into whether the Trump campaign was involved in Russia's interference in the 2016 presidential election as well as a legal battle with adult film star Stormy Daniels.

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Trump's campaign has also spent about $150,000 at Trump businesses, including the legal fees, per the FEC report. That includes about $68,000 at the Trump International Hotel in Washington, DC, to cover costs including event rental space, hotel stays and parking.

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iehi-feed-63862 Sat, 14 Apr 2018 22:40:07 GMT A Sidelined Wall Street Legend Bets on Bitcoin (NOVOGRATZ) http://implode-explode.com/viewnews/2018-04-14_ASidelinedWallStreetLegendBetsonBitcoinNOVOGRATZ.html Novogratz has certainly been making the most of the speculative bubble to rebuild his fortune, but he claims to be invested in the utopian aspects of blockchain as well. He doesn't think that cryptocurrencies will replace the dollar or the yen, but he believes that they will be a boon to countries in the developing world, where people don't have trust in their fiat currencies, and that blockchain can revolutionize the way information is logged and shared and, in our age of data breaches, protected. "I'm good at selling the dream," he said. "I can get onstage and get people to start saying ‘Hallelujah! Hallelujah!' "

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By the fall [of 2017], Novogratz was a billionaire once more. The price of a single bitcoin had been close to three thousand dollars during the summer; now it was clawing at five thousand. I visited him one Wednesday in October, at his office, walking in past a large statue of Evel Knievel in the lobby--the base reads "Bones heal, pain is temporary and chicks dig scars." Plush sofas were occupied by representatives of the Brown University endowment, a member of the board of Tesla, and the heads of a major publicity firm, among others.

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Two weeks earlier, Novogratz had announced his decision to rejoin the hedge-fund world and launch a cryptocurrency fund with a hundred and fifty million dollars of the money he had personally made on crypto and three hundred and fifty million from outside investors.

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After bitcoin and other currencies soared over the summer and fall, Novogratz presented this stage of crypto as a "speculative mania phase" that would crash like the dot-com bust but then reëmerge with more mature players. Out with AltaVista, in with Google. In Novogratz's estimation, individual cryptocurrencies would fail--although he is bullish on bitcoin and ether retaining their value in the long term. "I don't know if the speculative phase ends in March, ends in a year from now, eighteen months from now," Novogratz told me, "but it will end." He suggested that it will end when "too many people have bought in." (At a dinner during the fall of 2017, one of my favorite Oberlin professors, a Marxist, told me that he had just bought some ether.)

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Novogratz's cryptocurrency hedge fund never launched. In December, after the price of a single bitcoin rocketed to more than nineteen thousand dollars, Novogratz told me that "it would be a different proposition raising a crypto hedge fund today than it was three months ago." He said he was not comfortable running other people's money when the currency was at its peak, and predicted that bitcoin would consolidate at between eight and sixteen thousand dollars. "I'd rather look stupid than be stupid," he added. Right after he told me of his plans to shelve his hedge fund, bitcoin experienced one of its habitual micro-crashes, falling to under fourteen thousand dollars a coin.

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Novogratz had described another idea to me, one several magnitudes more audacious--certainly more institutional, and potentially more durable--than a mere half-a-billion-dollar hedge fund. He wanted to launch a publicly traded merchant bank solely for cryptocurrencies, which, with characteristic immodesty, he described as "the Goldman Sachs of crypto," and was calling Galaxy Digital. "I'm either going to look like a genius or an idiot," he said.

Novogratz announced the bank's launch in early January, the same week that Dimon, of JPMorgan Chase, who is one of the most vocal critics of cryptocurrency, publicly regretted calling bitcoin a fraud ("The blockchain is real," he told Fox Business). Shortly afterward, I sat down with Novogratz in his Tribeca apartment's far-flung kitchen to discuss Galaxy Digital.

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The new entity's launch was not so much an I.P.O. as a complex R.T.O., or reverse takeover, involving a Canadian shell company called Bradmer Pharmaceuticals. Galaxy Digital would still be based in New York, but because Canada offered easier and faster access to the public market Novogratz had decided to launch on the Canadian TSX venture exchange, with plans to eventually transfer to Canada's main exchange. He would contribute around three hundred and fifty million dollars, while raising another two hundred and fifty million dollars.

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iehi-feed-63858 Thu, 12 Apr 2018 21:13:26 GMT Trump directs top economic advisers to look at re-entering TPP http://implode-explode.com/viewnews/2018-04-12_TrumpdirectstopeconomicadviserstolookatreenteringTPP.html President Trump has directed his top economic and trade advisers to look into re-entering the Trans-Pacific Partnership, nearly a year after he withdrew the U.S. from the multilateral trade agreement in of his first acts as president.

Trump told a group of Republican senators during a meeting Thursday that he had assigned National Economic Council Chairman Larry Kudlow and U.S. Trade Representative Robert Lighthizer "the task of taking another look at TPP," Sen. Pat Roberts, chairman of the Senate Committee on Agriculture, told reporters at the White House.

"We're very excited about seeing those trade opportunities reaffirmed," said Sen. Deb Fischer, R-Neb., who was also present for the meeting. Fischer said Trump also mentioned "the importance" of the North Atlantic Free Trade Agreement, which his administration is currently renegotiating with Canada and Mexico.

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iehi-feed-63854 Wed, 11 Apr 2018 22:52:57 GMT Corker on new $1.9 tln deficit estimate: Tax cuts could be 'one of the worst votes I've made' http://implode-explode.com/viewnews/2018-04-11_Corkeronnew19tlndeficitestimateTaxcutscouldbeoneoftheworstvotesI.html Retiring Tennessee Sen. Bob Corker (R) said his vote on the GOP tax law could be one of the worst of his career if estimates that it will add $1.9 trillion to deficits over a decade prove correct.

"If it ends up costing what has been laid out here, it could well be one of the worst votes I've made," he said at a Senate Budget Committee hearing on the Congressional Budget Office (CBO) estimate that produced the figure.

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The new CBO estimate that the bill would cost $1.9 trillion through 2028 is higher than previous available estimates, largely because it includes the interest costs of servicing the debt, as well as more recent economic data. The Joint Committee on Taxation had estimated the bill would cost roughly $1.1 trillion over a decade at the time Corker cast his vote. Both estimates take into account the effects of economic growth on revenues.

This happened only slightly faster than we expected...

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iehi-feed-63852 Wed, 11 Apr 2018 21:54:48 GMT Venezuela in apparent "Stealth Default"; stopped bond payments in September http://implode-explode.com/viewnews/2018-04-11_VenezuelainapparentStealthDefaultstoppedbondpaymentsinSeptember.html Venezuela stopped paying bondholders in September, according to central bank data, contradicting statements by President Nicolás Maduro that the country would continue to honour its debts while negotiating a resettlement with its creditors.The data show that regular foreign debt payments of hundreds of millions of dollars a month, in line with the country's sovereign obligations, fell to a few tens of millions from last October for fees and the legacy of a 1980s-era restructuring."This proves that Venezuela is deliberately hoodwinking bondholders and engaging in a stealth default," said Russ Dallen of boutique bank Caracas Capital, who follows Venezuelan debt closely.The data were posted in an Excel file as part of a recent revamp of the central bank's website and include monthly expenditures in US dollars on public foreign debt payments going back to 1996. Previously, data on foreign debt payments were published in the form of a ratio that revealed little information, Mr Dallen said. "This must have been posted by an intern," he added.

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The central bank data, which cover payments of sovereign debt only and exclude obligations by PDVSA and other state entities, show that just $83m was paid in October, compared with sovereign obligations amounting to $465m, according to data from Caracas Capital.Payments in November fell to $28m, compared with obligations of $183m, and in December declined to $23m, compared with obligations of $242m.

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"They have been doing it [defaulting] strategically to sow confusion. They have said they have begun the process of paying things they clearly did not pay, and blamed it all on sanctions."The US has imposed several rounds of sanctions on Venezuelan individuals and institutions. Adding to pressures last August, it also banned any involvement in new bonds or shares issued by the government or PDVSA. Last month it prohibited involvement in the country's proposed digital currency, the petro, as well

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iehi-feed-63840 Fri, 06 Apr 2018 19:16:32 GMT German court says Carles Puigdemont can be released on bail; extradition for "rebellion" barred http://implode-explode.com/viewnews/2018-04-06_GermancourtsaysCarlesPuigdemontcanbereleasedonbailextraditionfor.html iehi-feed-63839 Fri, 06 Apr 2018 18:14:07 GMT Stocks Tank on Jobs Data and Trade Worries http://implode-explode.com/viewnews/2018-04-06_StocksTankonJobsDataandTradeWorries.html Wall Street is under pressure Friday, April 6, after the U.S. added less jobs than expected in March. The U.S. added 103,000 jobs in March. Analysts polled by FactSet expect the U.S. economy added 185,000 nonfarm jobs to the payroll in March, which would be a slowdown from the 313,000 jobs added in February. February's nonfarm payroll additions was the fastest in a month since July 2016.

The unemployment rate came in at 4.1%, steady from February's rate, a 17-year low. FactSet economists expect the U.S. unemployment rate for March to come in at 4%.

The Dow Jones Industrial Average was down 1%, or 242 points, to 24,263 while the S&P 500 fell 0.8% and the Nasdaq dropped 0.78%.

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Chief Operating Officer Sheryl Sandberg told Bloomberg that some advertisers have, in fact, reduced their spending. "We've seen a few advertisers pause with us and they're asking the same questions that other people are asking," Sandberg was reported as saying. "They want to make sure they can use the data and use it safely." Sandberg added that Action Alerts Plus holding Facebook is engaging in "reassuring conversations with advertisers, just as [it is] with people."

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iehi-feed-63829 Tue, 03 Apr 2018 16:48:10 GMT Stunned Investors See 95% Gains on Defaulted Puerto Rico Bonds http://implode-explode.com/viewnews/2018-04-03_StunnedInvestorsSee95GainsonDefaultedPuertoRicoBonds.html Of all the wild, head-scratching moves in financial markets this year, there are few that have surprised investors quite as much as the rally in defaulted Puerto Rico bonds. "It just blows my mind," says Matt Dalton, chief executive officer of Belle Haven Investments.

Since sinking to a mere 20.8 cents on the dollar in December, prices on the island's most frequently traded securities have climbed steadily and reached a high of 45 cents last week before paring gains during the past few days. Not only are Puerto Rico's bonds the top performer in the $3.9 trillion municipal market, they've gained more than any other dollar-denominated debt in the world, according to data compiled by Bloomberg.

The rally started inconspicuously enough back in late December, with a penny gain here and there that analysts chalked up to bottom fishing after prices collapsed in the aftermath of Hurricane Maria.

But then the increases started coming in bigger chunks as word spread that the island may emerge from the devastation with more money on hand than anticipated, a development that creditors bet would translate into better debt-restructuring terms.

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"I'm surprised by the amount that the bonds have rallied because there's still a lot of questions to be asked," said Mark Paris, senior portfolio manager atInvesco Advisers Inc. which oversees $27.2 billion in municipal assets. "They need to do a lot for the people on the island before they start really worrying about bondholders. So I don't know how you calculate the recovery."

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Even with federal funds for rebuilding after the storm, Puerto Rico faces challenges. More than 45 percent of residents live in poverty, workforce participation is about 40 percent and the fiscal plan projects the population will still shrink.

"The numbers are still pretty ugly," said Joe Rosenblum, director of municipal credit at AllianceBernstein LP, which oversees $41 billion of municipal debt. "For now, I think the optimism has played out."

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iehi-feed-63827 Tue, 03 Apr 2018 02:01:54 GMT Teacher strikes shut down schools across Oklahoma, Kentucky http://implode-explode.com/viewnews/2018-04-02_TeacherstrikesshutdownschoolsacrossOklahomaKentucky.html Classes were canceled Monday for hundreds of thousands of students across two states as striking teachers rallied at Capitols in Oklahoma and Kentucky to demand improved funding for education.

The walkouts come less than a month after teachers in West Virginia ended a nine-day strike that shuttered schools there and less than a week after thousands of Arizona teachers rallied to demand a 20% pay increase.

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Teachers became outraged last week when the state Legislature, struggling to fund the public employee retirement system, passed a bill to overhaul the pensions. That prompted more than 500 teachers to flood the Capitol on Friday to protest. The crowd ballooned into the thousands Monday.

Teachers also oppose financing proposals for privately run, publicly financed charter schools.

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iehi-feed-63826 Tue, 03 Apr 2018 01:54:00 GMT Trouble for big tech as consumers sour on Amazon, Facebook and co http://implode-explode.com/viewnews/2018-04-02_TroubleforbigtechasconsumerssouronAmazonFacebookandco.html The past two weeks have been difficult for the tech sector by every measure. Tech stocks have largely driven the year's stock market decline, the largest quarterly drop since 2015.

Facebook saw more than $50bn shaved off its value after the Observer revealed that had harvested millions of people's user data for political profiling... Amazon, meanwhile, long the target of President Trump's ire, saw more than $30bn, or 5%, shaved off its $693bn market capitalization after it was reported that the president was "obsessed" with the company and that he "wondered aloud if there may be any way to go after Amazon with antitrust or competition law".

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Big tech's critics may be forgiven a moment of schadenfreude. But for shareholders and pension plans, the tarnishing of tech could have serious consequences.

Apple, Amazon and Alphabet make up 10% of the S&P 500 with a combined market capitalization market cap of $2.3tn. Add Microsoft and Facebook, with a combined market value of $1.1tn, and the big five make up 15% of the index.

Overall, technology makes up 25% of the S&P. If tech pops, the thinking goes, so pops the market.

"We're one week into a sell-off after a multi-year run-up," says Eric Kuby of North Star Investment Management. "The big picture is that over the past five years a group of mega cap tech stocks like Nvidia, Netflix, Facebook have gone up anywhere from 260% to 1,800%."''

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Until recently, investors have been betting on years of unfettered growth. In a tighter, more regulated environment that bet may not look so good.

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iehi-feed-63824 Mon, 02 Apr 2018 18:27:52 GMT Dow drops 700 points as Amazon tumbles, trade war fears rise http://implode-explode.com/viewnews/2018-04-02_Dowdrops700pointsasAmazontumblestradewarfearsrise.html The Dow dropped more than 700 points and the Nasdaq plunged 3% on Monday. All three major indexes are now in the red for the year.

The sell-off on the first day of the second quarter came after President Trump once again attacked Amazon on Twitter. Amazon, one of the biggest drivers of the 2017 market rally, tumbled 5%, wiping out more than $37 billion of its market value.

Trump once again accused Amazon of taking advantage of the US Postal Service, and he suggested that Amazon does not pay its fair share of tax.

In fact, Amazon pays the same lower rate that the post office charges other bulk shippers, and it collects sales tax in every state that charges it. Amazon does not collect sales tax on purchases made from third-party vendors.

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iehi-feed-63820 Sun, 01 Apr 2018 15:32:19 GMT Was Robert Mercer's Vast Operation to Put Trump in the White House Just About Tax Avoidance? http://implode-explode.com/viewnews/2018-04-01_WasRobertMercersVastOperationtoPutTrumpintheWhiteHouseJustAboutT.html In 2015 the Internal Revenue Service released a memo indicating that the basket option was an improper maneuver to convert short term capital gains into long term gains. To date, there has been no public announcement of any Federal regulatory action taken against Renaissance or Mercer over the $6 billion tax avoidance scheme.

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Hedge funds already receive a perverse form of taxation known as "carried interest" that allows their winnings to be taxed at rates lower than those paid by some plumbers and nurses. This cozy tax scheme allows managers of hedge funds and private equity funds to have much of their income taxed as long term capital gains rather than the almost double tax rate that would be applied if it were treated as wage income.

It's time for the American public to find out just what happened to the $6.8 billion tax problem that Robert Mercer's Renaissance Technologies had with the IRS before Trump's election.

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iehi-feed-63807 Wed, 28 Mar 2018 20:34:40 GMT Judge rejects Trump push to dismiss emoluments lawsuit http://implode-explode.com/viewnews/2018-03-28_JudgerejectsTrumppushtodismissemolumentslawsuit.html A federal judge on Wednesday rejected President Trump's push to dismiss a lawsuit accusing him of violating the Constitution by collecting profits from his luxury hotel in the nation's capital.  U.S. District Court Judge Peter Messitte shot down the Justice Department's request to dismiss the lawsuit, which argued the plaintiffs had no legal standing to sue. The judge, based in Greenbelt, Md., said he will schedule another hearing to weigh the administration's other claims. 

The decision is a blow to Trump, who has long claimed that his business arrangements are legal and do not pose a conflict of interest. 

Critics say that Trump is violating the emoluments clause, which bans presidents from receiving gifts or payments from foreign governments without Congress's explicit approval.

After the 2016 election, Trump broke with precedent by refusing to divest in his businesses. The then-president elect instead placed his assets in a trust controlled by his two adult sons.

Ethics watchdogs say the president is violating the clause every time his hotels or golf courses receive payments from foreign governments because Trump still owns his stake in them.

The Trump Organization has said it would donate all profits from foreign governments to the U.S. Treasury. Last month, the Treasury Department said it received a check from the business meant to cover last year, but would not confirm the check's amount or date.

Messitte sided with attorneys general in Washington, D.C., and Maryland who argued they have standing to sue because other hotels in the region must compete with the Trump International Hotel for business. 

It's still a conflict of interest even if Trump returns every penny of profits.

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