Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-64596 Wed, 20 Feb 2019 21:13:05 GMT Fed loses last shreds of credibility as it throws in towel on balance sheet reduction http://implode-explode.com/viewnews/2019-02-20_Fedloseslastshredsofcredibilityasitthrowsintowelonbalancesheetre.html Federal Reserve officials discussed at their meeting three weeks ago ending the reduction of bonds on the central bank's balance sheet before the end of 2019, according to minutes released Wednesday.

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The minutes showed extensive discussion of market conditions, particularly on the emphasis that Fed actions were having on prices of risky assets like stocks and corporate bonds.

"Bottom line, while the Fed I believe clearly had room for the current pause because of the economic slowdown going on overseas, it should also be clear to everyone that they are mostly beholden to asset prices, both the stock market and credit spreads with that driving policy," Peter Boockvar, chief investment officer at Bleakley Advisory Group, said in a note.''

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iehi-feed-64595 Wed, 20 Feb 2019 20:54:34 GMT Supreme Court Puts Limits on Police Power to Seize Private Property http://implode-explode.com/viewnews/2019-02-20_SupremeCourtPutsLimitsonPolicePowertoSeizePrivateProperty.html The Supreme Court has ruled that the Eighth Amendment, which bars "excessive fines," limits the ability of the federal government to seize property. On Wednesday, the court ruled that the clause also applies to the states.

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The case concerned Tyson Timbs, who pleaded guilty to selling $225 of heroin to undercover police officers. He was sentenced to one year of house arrest and five years of probation, and he was ordered to pay $1,200 in fees and fines.

State officials also seized Mr. Timbs's vehicle, which he had bought with the proceeds of his father's life insurance policy; authorities said he had used it to commit crimes. Justice Ginsburg wrote that the vehicle was worth "more than four times the maximum $10,000 monetary fine assessable against him for his drug conviction."

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iehi-feed-64588 Sun, 17 Feb 2019 19:07:37 GMT JPMorgan Has Its Own Cryptocurrency http://implode-explode.com/viewnews/2019-02-17_JPMorganHasItsOwnCryptocurrency.html JPMorgan Chase this morning announced the first cryptocurrency to be rolled out by a major U.S. bank. How will it be used? The new tokens, each of which represents a U.S. dollar, will help settle some payments between the bank's clients. CNBC reports that the new digital coin will enter testing "in a few months." It will facilitate a "tiny fraction" of its wholesale payments business.

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The bank has come a long way on crypto. Its C.E.O., Jamie Dimon, famously declared Bitcoin a "fraud" in 2017 and said he would fire any employee caught trading it. (He later regretted his comments and added that he believed in the value of blockchain, the technology behind cryptocurrencies.)

Some 17 days before this news came out, JP Morgan was saying that cryptocurrencies would only be useful in a "dystopia" outcome (we wonder if it occurred to them that we may already be in a sufficiently-dystopic scenario...)

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iehi-feed-64587 Sun, 17 Feb 2019 19:05:40 GMT Amazon Not Paying Federal Income Taxes on $11.2 Billion Profits -- Trump Tax Cuts Largely to Thank http://implode-explode.com/viewnews/2019-02-17_AmazonNotPayingFederalIncomeTaxeson112BillionProfitsTrumpTaxCuts.html This tax-free break comes even though Amazon almost doubled its U.S. profits from $5.6 billion to $11.2 billion between 2017 and 2018. To top it off, Amazon actually reported a $129 million 2018 federal income tax rebate--making its tax rate -1%.

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ITEP notes that its non-existent federal tax payment is a result of the Trump Administration's corporation-friendly tax cuts. The think tank writes that the 2017 Tax Cuts and Jobs Act not only decreased corporate tax rates from 35% to 21%, but it also didn't close "a slew of tax loopholes that allow profitable companies to routinely avoid paying federal and state income taxes on almost half of their profits."

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iehi-feed-64582 Wed, 13 Feb 2019 00:03:52 GMT Bill Gates: Alexandria Ocasio-Cortez wealth tax idea misses the point (+SICK MMT BURN) http://implode-explode.com/viewnews/2019-02-12_BillGatesAlexandriaOcasioCortezwealthtaxideamissesthepointSICKMM.html Instead, he said, lawmakers should focus on things like the estate tax, taxes on capital and Social Security. His view may be more closely aligned with Sen. Elizabeth Warren's proposed tax policy that focuses on taxing net worth on households worth more than $50 million.

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Gates.. also ripped the increasingly popular modern monetary theory... The theory, also known as MMT, dismisses concerns about sovereign debt since countries that print their own currency can't really run out of money. "That is some crazy talk," Gates told The Verge.

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iehi-feed-64581 Tue, 12 Feb 2019 23:54:29 GMT Trump made $5.7 billion synonymous with border security. That was a mistake. (NOW MUST TAKE 1/20th ORIG. OFFER) http://implode-explode.com/viewnews/2019-02-12_Trumpmade57billionsynonymouswithbordersecurityThatwasamistakeNOW.html He refused to support a bipartisan compromise in February 2018 that would have given him $25 billion over 10 years, including $2.5 billion that year. Trump then rejected a stopgap spending bill in December that would have prevented a shutdown and left more time for lawmakers to reach a deal.

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Now, with the deadline to fund the government coming up once again, lawmakers on Monday night worked out a compromise to avert another painful and wasteful shutdown.

That deal would keep the government open and give Trump a chunk of money, $1.375 billion to be precise, for his border wall. It's certainly not what the White House wanted, but it would prevent another costly shut down and get some of his wall built.

Trump should take it while he can. He should make a show of accepting the compromise, hold himself up as a leader, and then do a nice photo op as soon as construction starts at the border.

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iehi-feed-64579 Tue, 12 Feb 2019 09:28:22 GMT Reason #437 to own gold: The Fed wants Negative Interest Rates http://implode-explode.com/viewnews/2019-02-12_Reason437toowngoldTheFedwantsNegativeInterestRates.html ... after a 20% drop in US stocks, the Fed has taken its foot off the pedal. But the people still want more... Both the European Central Bank and the Bank of Japan were supposed to start tightening policy and raising rates... now, they are both considering cutting interest rates even deeper into negative territory.

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The President of the Federal Reserve Bank of St. Louis thinks current interest rates are "too restrictive." He too wants lower rates.

The San Francisco Fed agrees -- they were singing the praises of negative interest rates in a recent research paper, saying they would have helped the economy recover even faster after 2008.

And SocGen economist Albert Edwards thinks the US will see negative interest rates and helicopter money (meaning central banks will print money and give it directly to the people) during the next recession.

Now that the public is once again being reminded that the Fed and its cohorts have no credibility, let's see if hard assets come back, as they should...

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iehi-feed-64570 Mon, 04 Feb 2019 00:36:57 GMT Democrats Push Plan to Increase Social Security Benefits and Solvency http://implode-explode.com/viewnews/2019-02-03_DemocratsPushPlantoIncreaseSocialSecurityBenefitsandSolvency.html The Social Security 2100 Act, which was introduced this past week in the House and the Senate, represents a sea change after decades dominated by concern that aging baby boomers would bankrupt the government as they begin drawing benefits from Social Security and other entitlement programs.

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The bill would provide an across-the-board benefit increase equivalent to about 2 percent of the average Social Security benefit. It would raise the annual cost-of-living adjustment to reflect the fact that older Americans tend to use more of some services like health care. And it would increase the minimum benefit to ensure that workers with many years of low earnings do not retire into poverty.

The bill would cut federal income taxes on Social Security benefits for about 12 million middle-income people while raising taxes elsewhere. The payroll tax rate would rise to 14.8 percent over the next 24 years, from 12.4 percent, and the payroll tax would be imposed on earnings over $400,000 a year.

The maximum amount of earnings subject to the Social Security payroll tax this year is $132,900. The proposal would, in effect, create a doughnut hole, where earnings from $132,900 to $400,000 would not be taxed.

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Nonpartisan actuaries at the Social Security Administration say that the program will soon be spending more than it takes in and that the trust funds for retirement and disability benefits will be depleted by 2034 if Congress makes no changes.

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Of all the money raised by the bill, about one-fourth would be used to increase benefits, and the rest would cover projected deficits in the Social Security trust over the next 75 years.

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Andrew G. Biggs, a Republican who was the principal deputy commissioner of Social Security under President George W. Bush, praised some features of Mr. Larson's bill.

"It doesn't just fix Social Security for 75 years," Mr. Biggs said. "It would keep the system permanently solvent. That's a real plus."

On the other hand, Mr. Biggs said: "The bill would give a lot of money to middle- and upper-income retirees who are already doing well. And it would significantly increase payroll taxes on workers."

Ruh-roh -- so the Dems are snatching the mantle of the party that wants to propose realistic reform to make SS more fair and solvent, and not be just a sop to the financial industry... this is quite a jiu-jitsu move!

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iehi-feed-64568 Sun, 03 Feb 2019 23:50:39 GMT McConnell, Rubio, and Graham Russian Benefactor Benefits as McConnell Rolls Back Sanctions http://implode-explode.com/viewnews/2019-02-03_McConnellRubioandGrahamRussianBenefactorBenefitsasMcConnellRolls.html Monday evening brought a new twist. It was discovered that one of Mitch McConnell's major donors, Len Blavatnik, who is tied to Vladimir Putin and other Russian oligarchs, benefited when Trump and McConnell lifted Russian sanctions on Sunday.

Along with McConnell, Republican Senators Marco Rubio and Lindsey Graham received hefty sums from Blavatnik as well.

... Mitch McConnell is benefiting from his direct and indirect ties to Putin and Russian oligarchs, which most likely guided McConnell's recent vote to lift Russian sanctions. And it would seem he clearly voted in the interest of himself, his king and his Russian ties, when McConnell should have been working in the best interest of the American people''

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iehi-feed-64560 Thu, 31 Jan 2019 23:26:18 GMT These billionaires are issuing terrifying warnings about debt levels http://implode-explode.com/viewnews/2019-01-31_Thesebillionairesareissuingterrifyingwarningsaboutdebtlevels.html In 2018, the federal government's deficit hit $1 trillion. But these are "good times," with soaring asset prices, solid corporate profits and record-low unemployment. What happens when a recession inevitably occurs. Our friend Jim Grant of Grant's Interest Rate Observer, says the deficit will blow out to $2 trillion.

So, $22 trillion in the whole and a $1 trillion deficit in a good year. Not to mention, interest rates are rising, which means all of this debt is just getting more expensive. Eventually, people will simply refuse to lend Uncle Sam any more money... because they know there's no way they'll be repaid.

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According to the Wall Street Journal, in the first eight months of 2018, overseas buyers of US Treasurys only bought half the amount they did over the same period in 2017.

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We don't know when this monetary experiment will end. The European Central Bank and Bank of Japan both essentially reneged on their plans to start tightening monetary policy. And yesterday, the Federal Reserve has signaled it will stop hiking rates. Global central banks, it seems, have already given up on their weak attempts to tighten... fearing the economy wouldn't hold up.

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iehi-feed-64559 Thu, 31 Jan 2019 23:23:50 GMT Central Banks Are Buying Gold at the Fastest Clip Since 1971 http://implode-explode.com/viewnews/2019-01-31_CentralBanksAreBuyingGoldattheFastestClipSince1971.html Central banks bought more bullion last year than anytime since 1971, when the U.S. ended the gold standard.Governments added 651.5 tons of gold to their coffers in 2018, a 74 percent increase from the previous year, according to a report from the World Gold Council.

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Central banks are expected to acquire an additional 600 tons this year, according to the consulting firm Metals Focus Ltd. The buys, which will help the banks diversify their foreign-exchange assets in a time of extraordinary political volatility, signal a growing confidence in the metal's value moving forward.

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The banks "were not net buyers even a decade ago," said Juan Carlos Artigas, director of investment research at the WGC, in a telephone interview. "As their foreign reserves expand, they are increasingly diversifying away from pure dollar exposure."

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iehi-feed-64558 Thu, 31 Jan 2019 23:22:20 GMT Fed Signals End of Interest Rate Increases http://implode-explode.com/viewnews/2019-01-31_FedSignalsEndofInterestRateIncreases.html Jared Bernstein, an economist at the left-leaning Center on Budget and Policy Priorities, summarized the Fed's new policy stance as "Don't just do something, stand there!" He added that the new approach "seems right to me." Mr. Bernstein said domestic growth was under pressure from tighter financial conditions, the slowdown in global growth and what he called "Trumpian chaos."

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For the last several years, the Fed said consistently that it planned to keep raising interest rates. The pace was uncertain, but the direction was clear. Wednesday's statement omitted previous language indicating that "some further gradual increases" would be warranted. Instead, it said the Fed would be "patient" in evaluating the health of the economy. And it suggested the Fed stood ready either to raise or to cut rates, depending on economic conditions.

Reinforcing this more cautious tone, the Fed also announced in a separate statement that it was prepared to slow or even reverse the steady slimming of its bond portfolio. This, too, was a striking shift. The Fed said in December that it was committed to steadily reducing its holdings of Treasuries and mortgage bonds, which it amassed during the financial crisis to help bolster the economy.

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While the Fed is pausing for now, Mr. Powell said he believed the central bank had raised rates to an appropriate level and had not overtightened. "I think our policy stance today is appropriate for the state of the economy," he said. "That's my feeling."

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iehi-feed-64557 Wed, 30 Jan 2019 23:35:57 GMT EU rejects Theresa May's plans to change Brexit deal http://implode-explode.com/viewnews/2019-01-30_EUrejectsTheresaMaysplanstochangeBrexitdeal.html "The Withdrawal Agreement is not open for renegotiation," said European Council President Donald Tusk. "Yesterday, we found out what the UK doesn't want. But we still don't know what the UK does want."

Other frustrated EU officials, including Brexit negotiator Michel Barnier, insisted the remaining 27 EU members were united and determined not to abandon the backstop they believe is key to maintaining peace on the border.

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Under the terms of the withdrawal agreement, the whole of the UK will remain in a customs union in relation to trade in goods with the EU "unless and until" the bloc agrees there is no prospect of a return to a hard border, while Northern Ireland will also conform to some rules of the European single market.

UK legislators critical of the clause say it threatens the integrity of the the UK's borders and could even lead to the UK staying within the EU customs union permanently.

Critics have argued for the inclusion of a mechanism to allow either side to withdraw from the backstop or a limit to how long it can last.

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iehi-feed-64555 Wed, 30 Jan 2019 21:27:01 GMT Fed Chair Powell: Maintaining rates was not a response to Donald Trump http://implode-explode.com/viewnews/2019-01-30_FedChairPowellMaintainingrateswasnotaresponsetoDonaldTrump.html Federal Reserve Chairman Jerome Powell said the central bank did not take "political considerations" into account when deciding on Wednesday to take a much more patient tact with interest rates. President Donald Trump has repeatedly attacked the Fed for raising rates.

Stocks surged after the Fed decided to hold interests rates in a range between 2.25 percent and 2.5 percent and said in a statement it will be more "patient" in assessing future rate hikes. The bank also put out a separate statement to ease concerns about its balance sheet unwind, something which Trump has specifically attacked.

They don't THINK they did it because of Trump -- but it's not clear he didn't get to them...

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iehi-feed-64553 Tue, 29 Jan 2019 23:46:44 GMT Brexit: What just happened and what happens next? http://implode-explode.com/viewnews/2019-01-29_BrexitWhatjusthappenedandwhathappensnext.html iehi-feed-64550 Mon, 28 Jan 2019 00:52:33 GMT The Financial Secret Behind Germany's Green Energy Revolution http://implode-explode.com/viewnews/2019-01-27_TheFinancialSecretBehindGermanysGreenEnergyRevolution.html iehi-feed-64538 Wed, 16 Jan 2019 22:13:37 GMT Anxiety and burnout: I work with kids. Here's why they're consumed with worry. http://implode-explode.com/viewnews/2019-01-16_AnxietyandburnoutIworkwithkidsHereswhytheyreconsumedwithworry.html Kids today have to constantly consider the perils of work and career with enough specificity to worry about it. At the same time that they stress about the future that's so very far off, they live with technology that keeps that anxiety consistently in the front of their minds.

... I rarely heard them frame any of this work and stress in terms of future success or even just stability. They usually didn't talk about their lives according to the myth so many parents, teachers, and community members raised Gen X and millennials with, the one that promises that if you work hard, you'll get a good job and have a nice, stable life or at least do better than your parents did. When they brought up their futures, if they weren't talking about careers, they understood that student debt was inevitable.

It later dawned on me: Why would they believe this myth? People in their 20s, 30s, and 40s teach and raise these kids. Those generations now know from experience that the idea that hard work and a little luck pays off isn't true. Between 30 years of stagnant wages, the rising costs of housing, health care, and education, and a recession just as many of us graduated from college, it's no wonder that millennials are on course to do financially worse than previous generations, just as Gen X did before us.

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iehi-feed-64537 Wed, 16 Jan 2019 22:12:01 GMT Bridgewater's Ray Dalio: Capitalism is not working for most people http://implode-explode.com/viewnews/2019-01-16_BridgewatersRayDalioCapitalismisnotworkingformostpeople.html "We're in a situation when the economy is at a peak, we still have this very big tension. That's where we are today," he said in November. "We're in a situation where, if you have a downturn, and we will have a downturn, I believe that -- I worry that that polarity will become greater."

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"If I was doing it, I think that you have to call that a national emergency," said Dalio. Then, reasoned Dalio, the President could "[take] responsibility for changing those metrics. I think there's a lot that can be done in private-public partnerships and so on to be able to change it, but I fear that that probably will not be done by the next time we have a downturn, and I fear for what that conflict is going to be like that."

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iehi-feed-64535 Wed, 16 Jan 2019 14:28:43 GMT Shutdown's Economic Damage Starts to Pile Up, Threatening an End to Growth http://implode-explode.com/viewnews/2019-01-16_ShutdownsEconomicDamageStartstoPileUpThreateninganEndtoGrowth.html iehi-feed-64532 Wed, 16 Jan 2019 01:34:49 GMT British pound strengthens after parliament rejects Brexit plan http://implode-explode.com/viewnews/2019-01-15_BritishpoundstrengthensafterparliamentrejectsBrexitplan.html Parliament on Tuesday struck down the divorce deal that Prime Minister Theresa May had negotiated with the rest of the European Union by a record margin. The defeat was expected, but the size of the loss -- 432 votes to 202 -- was a surprise.

The pound, which had fallen below $1.27 earlier on Tuesday, erased its losses after the vote and strengthened to $1.28. Some analysts had predicted the pound would rally if May suffered a major defeat because that would raise the chance of Brexit being delayed.

The crushing loss means parliament may now wield greater control over the process. Capital Economics said lawmakers could move to delay Brexit while they work on alternatives.

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