Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-62156 Thu, 27 Apr 2017 23:29:46 GMT Donald Trump used to hate Wall Street. Now he embraces it http://implode-explode.com/viewnews/2017-04-27_DonaldTrumpusedtohateWallStreetNowheembracesit.html The Wall Street influence is evident already in Trump's policy flip flops.

He's dialed back massively on the protectionist trade talk, especially on China. Trump campaigned on ripping up trade agreements like NAFTA and labeling China a currency manipulator (a fancy word for a cheater) on "Day One" in office. None of that happened.

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He's even started saying nice things about Janet Yellen, the head of the Federal Reserve, whom he blasted on the campaign trail for rigging the economy to make Obama look better.

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Trump relishes praise, and investors have cheered his pro-Wall Street shift by sending the stock market to record highs. It's been dubbed the "Trump rally." The Dow and S&P 500 have jumped over 10% since he won the election, a fact the president likes to tout on Twitter and in his speeches (it's even mentioned on the White House website).

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iehi-feed-62148 Thu, 27 Apr 2017 14:43:57 GMT Fiscal FactCheck: How Much Will Trump's Tax Plan Cost? http://implode-explode.com/viewnews/2017-04-27_FiscalFactCheckHowMuchWillTrumpsTaxPlanCost.html iehi-feed-62145 Wed, 26 Apr 2017 18:47:46 GMT There's a Huge Disagreement Between Bonds and Stocks http://implode-explode.com/viewnews/2017-04-26_TheresaHugeDisagreementBetweenBondsandStocks.html iehi-feed-62142 Tue, 25 Apr 2017 22:44:33 GMT Trump is caving on border wall funding after showing his base that he tried http://implode-explode.com/viewnews/2017-04-25_Trumpiscavingonborderwallfundingaftershowinghisbasethathetried.html Last night the president backed off his demand that any deal to fund the federal government include money to start construction on his border wall. At an event with conservative journalists, Trump said he's okay waiting until September to have this fight.

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Even after he realizes the border wall is infeasible, he is unlikely to ever acknowledge it publicly because it was such a central rationale of his candidacy. "I will build a great wall," Trump promised in his June 2015 announcement speech. "And nobody builds walls better than me, believe me. ... And I will make Mexico pay for that wall. Mark my words." (The Huffington Post created a timeline tracking his promises on the wall over the past two years.)

-- The president's aides have convinced him that he can present a little bit of money for border security, especially technology and more agents, as a victory. And he will avert a government shutdown that would have raised questions about his competence and basic leadership ability, especially with the GOP in total control of Washington. Trump has already begun taking credit for a drop in illegal border crossings and a reduction in crime along the border. He says his tough enforcement policies are deterring many from trying to enter the country.

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iehi-feed-62136 Tue, 25 Apr 2017 00:32:18 GMT Miami Is Spelling Doom for the Real Estate Market http://implode-explode.com/viewnews/2017-04-24_MiamiIsSpellingDoomfortheRealEstateMarket.html ... more than 11,000 new condos [are] scheduled to hit Miami's market by 2018. That's about 70% more condo units than Miami already has. This is going to be like pouring jet fuel on a raging fire. And yet speculators continue to "flip" condos across the city.''

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It's happening all across Florida, Las Vegas, and Atlanta. It's also happening in small U.S. cities like Fresno, California and Tacoma, Washington.

According to real estate site Trulia, more than 6% of home sales last year were "flips." These are properties that have sold at least twice in the past years.

That's up 5.3% from a year ago. More importantly, we're now seeing the highest level of flipping activity since 2006...which was the peak of the last housing bubble. This is a big deal. It tells us that the U.S. housing market is likely in the late stages of a bull market.

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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-62131 Mon, 24 Apr 2017 15:56:06 GMT Dividend Cuts Hit High For Past 4 Years; Suggest Economy In Contraction http://implode-explode.com/viewnews/2017-04-24_DividendCutsHitHighForPast4YearsSuggestEconomyInContraction.html iehi-feed-62128 Sun, 23 Apr 2017 20:54:13 GMT Broken Employment http://implode-explode.com/viewnews/2017-04-23_BrokenEmployment.html iehi-feed-62126 Sun, 23 Apr 2017 20:17:33 GMT Telling the truth: The looming pension-pocalypse http://implode-explode.com/viewnews/2017-04-23_TellingthetruthTheloomingpensionpocalypse.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-62122 Fri, 21 Apr 2017 22:27:31 GMT You Are Not An Investor http://implode-explode.com/viewnews/2017-04-21_YouAreNotAnInvestor.html You are not an investor. One can only be an investor in functioning markets. There have been no functioning markets since at least 2008, and probably much longer. That's when central banks started purchasing financial assets, for real, which means that is also the point when price discovery died. And without price discovery no market can function.

You are therefore not an investor. Perhaps you are a cheat, perhaps you are a chump, but you are not an investor. If we continue to use terms like ‘investor' and ‘markets' for what we see today, we would need to invent new terms for what these words once meant. Because they surely are not the same thing. Even as there are plenty people who would like you to believe they are, because it serves their purposes.

Central banks have become bubble machines, and that is the only function they have left. You could perhaps get away with saying that the dot-com bubble, maybe even the US housing bubble, were not created by central banks, but you can't do that for the everything bubble of today.

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iehi-feed-62121 Fri, 21 Apr 2017 22:14:14 GMT This expert thinks Donald Trump will fold on the government shutdown http://implode-explode.com/viewnews/2017-04-21_ThisexpertthinksDonaldTrumpwillfoldonthegovernmentshutdown.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-62118 Fri, 21 Apr 2017 16:11:01 GMT Paul Tudor Jones Says U.S. Stocks Should ‘Terrify' Janet Yellen http://implode-explode.com/viewnews/2017-04-21_PaulTudorJonesSaysUSStocksShouldTerrifyJanetYellen.html The legendary macro trader says that years of low interest rates have bloated stock valuations to a level not seen since 2000, right before the Nasdaq tumbled 75 percent over two-plus years. That measure -- the value of the stock market relative to the size of the economy -- should be "terrifying" to a central banker... Jones is voicing what many hedge fund and other money managers are privately warning investors: Stocks are trading at unsustainable levels. A few traders are more explicit, predicting a sizable market tumble by the end of the year.

Last week, Guggenheim Partner's Scott Minerd said he expected a "significant correction" this summer or early fall. Philip Yang, a macro manager who has run Willowbridge Associates since 1988, sees a stock plunge of between 20 and 40 percent, according to people familiar with his thinking.

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iehi-feed-62101 Wed, 19 Apr 2017 19:21:39 GMT Bill O'Reilly is officially out at Fox News http://implode-explode.com/viewnews/2017-04-19_BillOReillyisofficiallyoutatFoxNews.html iehi-feed-62100 Wed, 19 Apr 2017 17:42:12 GMT It's Steve Mnuchin's Turn To Be Thrown Under the Trump Bus http://implode-explode.com/viewnews/2017-04-19_ItsSteveMnuchinsTurnToBeThrownUndertheTrumpBus.html On Monday, Mnuchin admitted that the jig was up. A tax overhaul by August, he told the Financial Times on Monday, was "highly aggressive to the point of not realistic." So naturally, Donald Trump, he of literally no impulse control or forethought, had this to say on Tuesday, once again throwing his Treasury secretary under the bus:

"We're in very good shape on tax reform. We have the concept of the plan. We're going to be announcing it very soon. But health care, we have to get the health care taken care of, and as soon as health care takes care of we are going to march very quickly. You're going to watch. We're going to surprise you. Right, Steve Mnuchin? Right?"

Clearly, the president has not yet made it to the "Nobody knew [tax reform] could be so complicated" stage of the learning process.

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iehi-feed-62096 Tue, 18 Apr 2017 14:01:23 GMT UK will never build enough homes to keep prices down  http://implode-explode.com/viewnews/2017-04-18_UKwillneverbuildenoughhomestokeeppricesdown.html iehi-feed-62093 Mon, 17 Apr 2017 22:47:22 GMT Shutdown: The Trump Reflation Fantasy Ends on Day 100 http://implode-explode.com/viewnews/2017-04-17_ShutdownTheTrumpReflationFantasyEndsonDay100.html ... a 100 year-old statute requires Congress to raise the ceiling for treasury borrowing periodically, but the Imperial City has now reached the point in which there is absolutely no way forward to accomplish this.

Moreover, that critical fact is ill-understood by Wall Street because it does not remotely recognize that all the debt ceiling increases since the public debt exploded after the 2008-09 crisis were an accident of the Obama presidency.

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