Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-60511 Tue, 23 Aug 2016 21:47:23 GMT BIS and JP Morgan-led Gold Capping Cartel Has Miners Underwater http://implode-explode.com/viewnews/2016-08-23_BISandJPMorganledGoldCappingCartelHasMinersUnderwater.html iehi-feed-60509 Tue, 23 Aug 2016 21:41:56 GMT Rent at Trump Tower Surged After Donald Trump Stopped Self-Funding His Campaign http://implode-explode.com/viewnews/2016-08-23_RentatTrumpTowerSurgedAfterDonaldTrumpStoppedSelfFundingHisCampa.html In March, when Trump was still paying for his presidential run mostly out of his own pocket, his campaign spent $35,458 to rent its headquarters in Trump Tower. Last month, however, that figure surged to $169,758, even as the number of paid campaign employees and staff dropped from 197 to 172 over the same period, the Huffington Post reports. The sharp increase in campaign spending appears to correspond to a large infusion in cash from outside donors. According to the Huffington Post, the amount Trump Tower has charged the campaign for rent has steadily increased since May, the same month that Trump clinched the nomination and inked a deal with the Republican National Committee to fund his campaign. At the end of May the campaign doled out $72,800, followed by $110,684 in June, and $169,758 in July.

Trump Tower isn't the only Trump property to have benefited. Over the same period, the Huffington Post reports a number of Trump's namesake golf courses and restaurants have earned a total of $260,000, citing F.E.C. records. In July alone, the campaign spent $495,000 on Trump's air travel, which is operated by a company that he owns. The Washington Post estimated that the Trump clan has pocketed $7.7 million as a result of the campaign's expenditures.

Who is surprised? Once a con artist, always a con artist...

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iehi-feed-60505 Tue, 23 Aug 2016 14:11:27 GMT Clinton emails recovered by FBI to be released just before election day http://implode-explode.com/viewnews/2016-08-23_ClintonemailsrecoveredbyFBItobereleasedjustbeforeelectionday.html iehi-feed-60504 Tue, 23 Aug 2016 13:55:10 GMT Citi Sours on Stocks; Cites "Great Rotation" http://implode-explode.com/viewnews/2016-08-23_CitiSoursonStocksCitesGreatRotation.html iehi-feed-60503 Tue, 23 Aug 2016 13:42:59 GMT Not The Best Time In History To Invest In Real Estate - Part 1 | The Wall Street Examiner http://implode-explode.com/viewnews/2016-08-23_NotTheBestTimeInHistoryToInvestInRealEstatePart1TheWallStreetExa.html iehi-feed-60502 Mon, 22 Aug 2016 21:28:17 GMT Revealed: ECB Secretly Hands Cash to Select Corporations http://implode-explode.com/viewnews/2016-08-22_RevealedECBSecretlyHandsCashtoSelectCorporations.html Now it has been revealed by The Wall Street Journal that the ECB has also secretly been buying bonds directly from companies, thus handing them directly its freshly printed money.

It has been doing so via "private placements." These debt sales are not open to the broader market. There's no need for a prospectus. Only a small number of institutional investors participate. It allows companies to raise cash quickly, without jumping through the normal hoops. Private placements are not unusual. What's new is that the ECB used them to buy bonds...

According to Apostolos Gkoutzinis, head of European capital markets at law firm Shearman & Sterling, cited by The Wall Street Journal: because there is no prospectus or the other formalities required in a normal bond offering, "there won't be any transparency, there won't be a press release. It's all done discreetly."

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Now, the race is on for eligible companies to wet their beaks in this new, much more discreet free-money fountain, while so-called "investors" scramble to divine what the biggest fish in the pond is about to buy next. If they're lucky they may even get a heads-up straight from the horse's mouth.The ECB's favorite banks will also get juicy fees underwriting the deals. The Journal reported that Credit Suisse has already "reshuffled its coverage of national central banks" in an attempt to tap into the new market.

...According to The Journal, Citigroup figured "that bonds eligible for ECB purchases have already outperformed ineligible bonds by roughly 30% since the bond-buying program was announced in March."

It's Financial Darwinism writ on a heretofore unimaginable scale. Thanks to ECB intervention, Europe's biggest companies with the strongest finances -- including some that are majority state-owned such as French energy giant EDF -- are gaining access to funds (many of them public) quicker, more easily, and at cheaper rates than anyone else in the market. From now on, they may even get the money in secret.

So... isn't the ECB now potentially tripping WTO anti-subsidy prohibitions?

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iehi-feed-60498 Mon, 22 Aug 2016 16:03:03 GMT Stephanie Pomboy: A Grim Outlook for the Economy, Stocks http://implode-explode.com/viewnews/2016-08-22_StephaniePomboyAGrimOutlookfortheEconomyStocks.html What ignited and supported the entire era of globalization was the spendthrift U.S. consumer; economies have been totally reliant on trade to U.S. consumers. This once-in-a-generation asset deflation will fundamentally change behavior, just as the Depression changed an entire generation's attitude about spending and saving.

Obviously, the burden of proof is on me, because for 20 years the consumer has reliably borrowed from China to buy their tube socks. Post-crisis, the consumer has clearly pulled back. How many months did we have disappointing retail sales numbers that no one could explain? They'd say it's too hot, too cold, there's Brexit. But what's really causing this slowdown in spending is that the post-crisis consumer is determined to save, and do it the old-fashioned way. Historically, when rates go down, people save less. In this cycle, things have completely reversed. Over the same stretch of time that the two-year note has gone from 4% to 1%, the savings rate has doubled. There are mountains of evidence to support my thesis. But every Wall Street analyst and the Fed is using the pre-crisis analytical framework to look at an economy that is fundamentally challenged.

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Q: Where, when, and how will helicopter money begin?

Japan is the most natural place for it to start, but Japan isn't dramatically different from the U.S., the U.K., or Europe. We're all dealing with an aging population. This is another great flaw in the logic of monetary-policy makers. They've pushed rates to and below zero in an effort to boost growth. But they did so against a population that is aging and needs more than ever to get returns on what they've set aside. By lowering rates, they've actually intensified the saving urge.

The statistics bear this out. Over the last four years, U.S. nominal GDP growth has gone from 4.3% to 4.1% to 3% to 2.4%. The deflator, the inflation we are supposed to be targeting, went from 1.9% to 1.6% to 1.5% to 1.1%. What greater proof do you need that lower rates aren't helping and, to the contrary, are making things worse? Growth and inflation are slowing, and it has to do with this aging demographic. Add the emotional and financial scares from the housing-bubble bust, and policy makers have really got it ass-backwards. They're taxing the economy, not stimulating it.

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Q: Is it possible that you're too negative? Stocks are hitting new highs and recent economic data seem reasonably sturdy.

The July payroll number was a barnburner on the upside. But that report is the exception. Jobless claims, the NFIB small business survey, the employment component of both the ISM manufacturing and nonmanufacturing surveys--they all suggest things are rolling over [getting worse]. Importantly, the No. 1 input into hiring--corporate profits--has posted five consecutive quarterly declines, which suggest employment growth will follow. Employment is going to look a lot softer over the next six months.

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Q: So what are you positive about?

Because economic growth won't be a catalyst to push rates higher, I continue to like government bonds. Look for a re-pricing of credit risk with the spreads between investment-grade and junk bonds widening out. We'll also have a renewal of QE in the U.S. and are seeing it elsewhere. And as Fed tightening goes out the window and the dollar sells off, we'll have another meaningful leg up in gold.

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iehi-feed-60496 Sun, 21 Aug 2016 18:31:36 GMT Fed's Fischer Seemingly Kinda-Maybe-Possibly Lays Groundwork For Further Rate Rise http://implode-explode.com/viewnews/2016-08-21_FedsFischerSeeminglyKindaMaybePossiblyLaysGroundworkForFurtherRa.html In comments prepared for The Aspen Institute's "Program on the World Economy", Fischer said employment has "increased impressively" since a 2010 low after the national financial crisis, and the unemployment rate has hovered near 5% for the last year.

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"So we are close to our targets," said Fischer, citing the Fed's dual mandate to seek maximum sustainable employment and an inflation rate of 2%.

... However, Fischer also used the speech to signal concern over what he characterized as "exceptionally slow" labor productivity growth.

Break out the goat entrails and incense; the game of Fedspeak-divination continues. Now, talking heads agree that the Fed's talking heads are talking up rates. Of course, the next inevitable crappy data point and the Fed will be avowedly back to "pausing" (even though the Fed funds rate doesn't even much anymore -- they can call us when they start reducing the Fed's balance sheet...) Ultimately, the Fed can't break too far from the global central bank herd which is locked in a trend of competitive-devaluation...

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iehi-feed-60495 Sun, 21 Aug 2016 16:49:20 GMT The Fed Launches A Facebook Page... And The Result Is Not What It Had Expected http://implode-explode.com/viewnews/2016-08-21_TheFedLaunchesAFacebookPageAndTheResultIsNotWhatItHadExpected.html iehi-feed-60491 Sun, 21 Aug 2016 13:36:27 GMT Schrute Bucks? Real Median Household Income Hasn't Grown Since 2000 (Actually 1999) http://implode-explode.com/viewnews/2016-08-21_SchruteBucksRealMedianHouseholdIncomeHasntGrownSince2000Actually.html iehi-feed-60488 Sat, 20 Aug 2016 16:50:41 GMT Brexit Armageddon was a terrifying vision -- but it simply hasn't happened http://implode-explode.com/viewnews/2016-08-20_BrexitArmageddonwasaterrifyingvisionbutitsimplyhasnthappened.html It was hard to avoid the doom and gloom, not just in the weeks leading up to the referendum, but in those immediately after it. Many of those who voted remain comforted themselves with the certain knowledge that those who had voted for Brexit would suffer a bad case of buyer's remorse.

It hasn't worked out that way. The 1.4% jump in retail sales in July showed that consumers have not stopped spending, and seem to be more influenced by the weather than they are by fear of the consequences of what happened on 23 June. Retailers are licking their lips in anticipation of an Olympics feelgood factor.

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The financial markets are serene. Share prices are close to a record high, and fears that companies would find it difficult and expensive to borrow have proved wide of the mark...

Some caveats are in order. It is still early days. Hard data is scant. Survey evidence is still consistent with a slowdown in the economy in the second half of 2016. Brexit may be a slow burn, with the impact only becoming apparent in the months and years to come.

But it is obvious that the sky has not fallen in as a result of the referendum, and those who said it would look a bit silly. By now, Britain was supposed to be reeling from the emergency budget George Osborne said would be necessary to fill a £30bn black hole in the public finances caused by a plunging economy. The emergency budget is history, as is Osborne.

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iehi-feed-60487 Sat, 20 Aug 2016 16:45:59 GMT The Saker on Russia-Turkey Rapprochement (Interview) http://implode-explode.com/viewnews/2016-08-20_TheSakeronRussiaTurkeyRapprochementInterview.html iehi-feed-60484 Fri, 19 Aug 2016 21:33:29 GMT Greek Villagers Rescued Migrants. Now They Are the Ones Suffering. http://implode-explode.com/viewnews/2016-08-19_GreekVillagersRescuedMigrantsNowTheyAretheOnesSuffering.html Today the migrants have mostly stopped coming. The coastline, once littered with orange life vests and wrecked boats, has been cleaned to a near-spotless white. But the human drama has left an imprint here, and across all of Lesbos, in ways that have only begun to play out.

The village is nearly empty of tourists this year as Germans, Swedes and other visitors who had long flocked to the crystalline waters of Lesbos go elsewhere, wary of spending their vacations in a place now associated with human desperation.

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"The whole village is proud of what we did," said Theano Laoumis, who helps run the To Kyma taverna. On the taverna's beach, refugee dinghies had landed in an unceasing stream. "You didn't know who to save first, there were so many people. But we did save them. It was only natural. That should bring good publicity, not bad."

The drop in business has hit Lesbos as Greece has struggled to emerge from a lengthy economic crisis. Some are bitter that the refugee tide has added to their woes.

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iehi-feed-60482 Fri, 19 Aug 2016 19:21:55 GMT Jimmy Carter: The U.S. Is an "Oligarchy With Unlimited Political Bribery" http://implode-explode.com/viewnews/2016-08-19_JimmyCarterTheUSIsanOligarchyWithUnlimitedPoliticalBribery.html iehi-feed-60474 Fri, 19 Aug 2016 14:05:09 GMT Paul Singer and Elliott Management say bond market 'breakdown' to be 'sudden, intense, and large' http://implode-explode.com/viewnews/2016-08-19_PaulSingerandElliottManagementsaybondmarketbreakdowntobesuddenin.html In a bleak new letter to investors, Paul Singer's Elliott Management warns that the bond market is "broken" and that when the central bank actions of recent years no longer ward off a market downturn, the subsequent loss of confidence could be severe.

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Too much power has been ceded to central banks, the letter adds, the value of money has been debased, inflation is probably inevitable, and when it happens, it could be swift and impossible to tamp down.

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The letter discusses, at some length, the oddity of an investor mentality that flies to an asset class regarded as a "safe haven" even when there are low or nonexistent returns attached to it and no guarantee that current conditions will persist.

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Among other things, the letter adds, the hedge fund is seeing opportunity in the distressed-energy sector despite the rebound of oil and gas prices from their lows. The fund also has been building up its gold position "in a conditional format," to ebb losses "should prices fall back from their recent strength."

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iehi-feed-60472 Fri, 19 Aug 2016 13:51:59 GMT Greenspan Warns Stagflationary Explosion Imminent http://implode-explode.com/viewnews/2016-08-19_GreenspanWarnsStagflationaryExplosionImminent.html Greenspan repeated his previously-voiced concern that the U.S. economy was headed toward a period of stagflation -- stagnant growth coupled with elevated inflation... "The very early stages are becoming evident," with unit labor costs beginning to rise and money supply growth starting to accelerate, he said.

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"I cannot perceive that we can maintain these levels of interest rates for very much longer," he told former Securities and Exchange Commission Chairman Arthur Levitt in a Bloomberg Radio interview to be aired this weekend and next.

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iehi-feed-60471 Thu, 18 Aug 2016 23:48:58 GMT Clinton Foundation says it will limit donations if Clinton is elected http://implode-explode.com/viewnews/2016-08-18_ClintonFoundationsaysitwilllimitdonationsifClintoniselected.html The Clinton Foundation said Thursday it will not accept foreign or corporate donations if Hillary Clinton is elected president in November... Bill Clinton also said the Clinton Global Initiative meeting in New York next month will be the final CGI meeting, no matter what happens with Hillary Clinton in November.

The decision is an acknowledgment by Bill Clinton that while he wants the work to continue, he understands that it needs to be refocused and retooled should his wife win in November... Bill Clinton has also decided not to give paid speeches if Hillary Clinton is elected president, his spokesman, Angel Urena, said Thursday.

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This week, State Department officials have faced questions this week about the department's interest in purchasing land for a US embassy in Lagos from Lebanese-Nigerian businessmen Ronald and Gilbert Chagoury. Gilbert Chagoury has donated more than $1 million to the Clinton Foundation, according to the foundation's website, which also notes that The Chagoury Group -- run by the brothers -- pledged to commit $1 billion to fight coastal erosion.

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And former Democratic Pennsylvania Gov. Ed Rendell, a Clinton supporter, told The New York Daily News over the weekend the foundation should be disbanded if she's elected.

"I definitely think if she wins the presidency, they have to disband it. I know it'll be hard for President (Bill) Clinton because he cares very deeply about what the foundation has done," Rendell said. "It'd be impossible to keep the foundation open without at least the appearance of a problem."

The CGI is in effect being "soft-shutdown", sparing the Clinton's from an investigation and prosecution that probably should (and might still) happen.

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iehi-feed-60470 Thu, 18 Aug 2016 15:55:42 GMT On The Impossibility Of Helicopter Money And Why The Casino Will Crash | Stockman http://implode-explode.com/viewnews/2016-08-18_OnTheImpossibilityOfHelicopterMoneyAndWhyTheCasinoWillCrashStock.html The growth spurt absolutely has not happened, and the recent sharp decline in in-bound containers at the West Coast ports means that the US retail sector is not provisioning for any rebound in sales during the coming fall and holiday seasons.

And that is why the Wall Street gamblers are so desperately hoping for helicopter money. The fact is, the Fed is out of dry powder via the "extraordinary" measures it has employed since the financial crisis.

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The only thing different technically about "helicopter money" policy is the suggestion by Bernanke and others that the treasury bonds could be issued directly to the Fed. That would just circumvent the dwell time in dealer (or "investor") inventories but result in exactly the same end state. In that event, of course, Wall Street wouldn't get the skim.

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But that's not the real reason why helicopter money policy is so loathsome. The unstated essence of it is that our monetary politburo would overtly conspire and coordinate with the White House and Capitol Hill to bury future generations in crushing public debts.

They would do this by agreeing to generate incremental fiscal deficits---as if Uncle Sam's current $19 trillion isn't enough debt----which would be matched dollar for dollar by an increase in the Fed's bond-buying or monetization rate. That amounts not only to teaching children how to play with matches; it's tantamount to setting fiscal forest fires across the land.

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iehi-feed-60469 Thu, 18 Aug 2016 15:37:19 GMT A Physics Lesson for Central Bankers http://implode-explode.com/viewnews/2016-08-18_APhysicsLessonforCentralBankers.html Years of pumping trillions of dollars, euros, yen and pounds into the economy by buying government debt and other securities hasn't produced the rebound in inflation that economics textbooks predicted. Record low borrowing costs haven't led to a surge in investment and spending that would lead to higher prices.

That's the kind of empirical evidence that should produce a reconsideration of what Rothschild Investment Trust Chairman Jacob Rothschild this week called "the greatest experiment in monetary policy in the history of the world." Neil Grossman, director of Florida-based bank C1 Financial and former chief investment officer at TKNG Capital Partners, likens the need to abandon the current economic orthodoxy with the impact of quantum physics on science in the last century.

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[The Fed's] Williams concluded that central banks should consider either higher inflation objectives or switching to GDP targeting: "Now is the time for experts and policy makers around the world to carefully investigate the pros and cons of these proposals," he wrote.

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I've written before about a theory dubbed Neo-Fisherism that argues for raising rates as a better solution to the current economic backdrop than driving them below zero. Maybe that's too radical to gain traction. But just as scientists are forced to review their assumptions when the experimental evidence undermines existing theories, central bank economists should acknowledge that the world isn't responding to their guidance in either the way they expected or how they would want it to. In short, a new approach to monetary policy is needed.

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iehi-feed-60467 Wed, 17 Aug 2016 19:36:03 GMT The Fed Is Searching for a New Framework. New Minutes Show It Doesn't Have One Yet (FRAMEWORK? HOW ABOUT CLUE) http://implode-explode.com/viewnews/2016-08-17_TheFedIsSearchingforaNewFrameworkNewMinutesShowItDoesntHaveOneYe.html The quandary facing the Federal Reserve this summer is the same as it was back in the spring, and winter, and last fall: By traditional guideposts like the unemployment rate, it looks as if it is time for the Fed to be raising interest rates. Yet the global economy seems to be locked in a low-growth, low-inflation world in which raising interest rates is at best unnecessary and at worst dangerous.

That tension was on display Wednesday in the minutes of the Fed's last policy meeting, which raised the possibility of rate increases as early as September.

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The result of all that debate at the July 26-27 meeting was affirming the status quo -- agreement that "it was prudent to accumulate more data in order to gauge the underlying momentum in the labor market and economic activity" and that "members judged it appropriate to continue to leave their policy options open and maintain the flexibility to adjust the stance of policy based on incoming information."

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