Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us 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-64533 Wed, 16 Jan 2019 02:40:29 GMT A-La Its Marijuana Stance, Justice Department Unilaterally Decides To Block Virtually All Online Wagering http://implode-explode.com/viewnews/2019-01-15_ALaItsMarijuanaStanceJusticeDepartmentUnilaterallyDecidesToBlock.html The U.S. now says the U.S. Wire Act bars all internet gambling that involves interstate transactions, reversing its position from 2011 that only sports betting was prohibited under the law passed 50 years earlier.

While the federal law specifically prohibits transmission of wagers and related information across state lines, the Justice Department's new interpretation will impact all online gambling because as a practical matter it's difficult to guarantee that no payments are routed through other states, said Aaron Swerdlow, an attorney with Glaser Weil Fink Howard Avchen & Shapiro LLP in Los Angeles.

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The businesses that will be most directly affected are interstate lotteries that have become well established after 2011, said Dennis Gutwald, an attorney with McDonald Carano LLP in Las Vegas. The Justice Department's new reading of the law won't affect intrastate online wagering, where patrons bet only from within a single state.

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Online poker and blackjack operations are much less developed than the lotteries, but they will have to examine how they can continue to be run in light of the Justice Department's opinion, according to Gutwald.

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iehi-feed-64519 Sat, 05 Jan 2019 02:46:10 GMT A Trump County Confronts the Administration Amid a Rash of Child Cancers http://implode-explode.com/viewnews/2019-01-04_ATrumpCountyConfrontstheAdministrationAmidaRashofChildCancers.html There are conflicting views in Johnson County of the administration's environmental rollbacks. There is talk that the federal government should get out of people's lives, even as local officials have called on the E.P.A. to take over the response to the contamination.

"When it comes to public health, we can go against party lines. And I don't agree with trying to roll back the E.P.A.'s role," said Steve Barnett, Franklin's mayor and a Republican. "Back in the day, there weren't any rules. That's why there was so much contamination," he said.

Many members of If It Was Your Child in the Franklin area play down the politics, noting that both parties have let the cleanup fall by the wayside. Nevertheless, their demands come at a time when the Trump administration has weakened the very rules that could prevent another Franklin.

"We should not have to fight Republicans or Democrats to save our children. It's not a political fight for us," said Stacie Davidson, a Trump voter who co-founded the parents' group with Mrs. Rhinehart (who didn't vote for Mr. Trump).

Mrs. Davidson said, "His loosening of E.P.A. regulations, it's infuriating." She added, "We're ruining the environment for money."

Mrs. Davidson learned in 2014 that her stepson, Zane, who was 10 at the time, had a rare form of leukemia. He is now in remission. She has traveled to Washington to speak in favor of stronger TCE regulations. "What we're fighting for is seemingly being undone right now," she said.

Still, she said, she did not regret her vote. "Trump's a businessman. There are great things he can do for our country. But he's used to building high rises for money," she said. "He's not as environmentally savvy. Our hope is that he surrounds himself with people who are more knowledgeable."

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Despite the emergence of alternatives to TCE, the Trump administration has stalled action on restricting its use. "There have been greener alternatives to TCE for years," said Tom Forsythe, an executive vice president at Kyzen, a Tennessee cleaning-materials company, who joined E.P.A. officials in a conference call in August 2017 to lay out other options.

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"I see good things that Trump has done," said Mr. Barnett, the mayor, emphasizing his town's future. "The economy's good. There's been a lot of investment into our city."

So sad to see kids literally poisoned to death because Trump panders to support from business and industry, meanwhile, the effected communities make excuses for Trump based on fictions of all the good he's doing. (Were these same people praising Obama for "surrounding himself with knowledgeable people", or the "economy doing well" on his watch? Our money's on "probably not"...)

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iehi-feed-64514 Fri, 04 Jan 2019 00:16:15 GMT Dow slides after Apple delivers bombshell China warning; ISM Plunges http://implode-explode.com/viewnews/2019-01-03_DowslidesafterAppledeliversbombshellChinawarningISMPlunges.html Apple, among the world's most widely held stocks, plummeted 10% in its darkest day in six years. The former king of the stock market fell to the fourth-biggest public company, behind Amazon, Microsoft and Alphabet.

The news sent shudders through global markets. The Nasdaq plunged 3%, closing back in bear market territory. The S&P 500 shed 2.5%, led lower by tech and industrial stocks. The market ended near the lows of the day.

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Beyond Apple, investors were also rattled by the biggest one-month decline in US factory activity since the Great Recession. The closely-watched ISM manufacturing index tumbled to a two-year low, providing further evidence of slowing growth and pain from the US-China trade war. ISM said manufacturing activity is still growing, but suffered a "sharp decline" last month.

"Awful, and worse to come," Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote to clients on Thursday. "Trade wars are not easy to win."

The "since the Great Recession/2008" comparables are coming at an increasing pace...

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iehi-feed-64511 Thu, 03 Jan 2019 01:24:31 GMT Apple being investigated by investor rights law firm for ‘potential securities fraud' related to China http://implode-explode.com/viewnews/2019-01-02_Applebeinginvestigatedbyinvestorrightslawfirmforpotentialsecurit.html iehi-feed-64501 Sun, 30 Dec 2018 19:16:22 GMT Trump on the Fed: 2015 and 2016 vs. Now http://implode-explode.com/viewnews/2018-12-30_TrumpontheFed2015and2016vsNow.html "We have a big, fat bubble coming up, you watch. We have artificially induced low interest rates," Trump told MSNBC's "Morning Joe" two days after announcing his candidacy in 2015. "I borrow money . . . you pay like nothing; they give you free money. Now that's bad, that's not good."

This month, Trump asked advisers about firing Fed Chairman Jerome Powell over rate increases, even after he baselessly accused President Barack Obama of forcing the Fed to keep rates low two years prior (Trump "now realizes he does not have the authority" to fire Powell, acting White House chief of staff Mick Mulvaney said Sunday).

"The interest rates are kept down by President Obama; I have no doubt that that's the reason they are being kept down," Trump told CNBC on Sept. 12, 2016. "I used to hope that the Fed was independent, and the Fed is obviously not independent. It's obviously not even close to being independent."

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iehi-feed-64499 Sun, 30 Dec 2018 03:11:05 GMT Wells Fargo to Pay States $575 Million Over Sales Practices http://implode-explode.com/viewnews/2018-12-29_WellsFargotoPayStates575MillionOverSalesPractices.html The settlement with 50 states and the District of Columbia announced Friday resolves state investigations into Wells Fargo's practices from 2002 to 2017. The practices, which have previously been disclosed, include opening bogus accounts, charging improper mortgage rate-lock extension fees and forcing insurance policies on auto-lending customers.

Wells Fargo's expenses surged over the past two years, driven by fines and legal costs as investigations multiplied across business lines. Following the 2016 revelation that bank employees opened as many as 3.5 million accounts without customer approval in order to meet sales goals, issues have emerged in the bank's consumer-lending, wholesale and wealth-management arms.

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iehi-feed-64498 Sun, 30 Dec 2018 03:08:53 GMT CNBC: Trump Sought Advice on Market Rout From Hedge Fund Investor http://implode-explode.com/viewnews/2018-12-29_CNBCTrumpSoughtAdviceonMarketRoutFromHedgeFundInvestor.html The unidentified investor was said to tell the official to tell the president to end his criticism of Federal Reserve Chairman Jerome Powell on Twitter, stop administration turnover and reach a trade deal with China in order to help markets, sources told CNBC.

The administration, which has judged Trump's success in part on stock market performance, is "determined" to boost equities, the sources said.

The call took place after a selloff on Christmas Eve, the worst day of Dec. 24 trading ever.

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iehi-feed-64491 Fri, 21 Dec 2018 21:50:14 GMT For the First Time in More Than 20 Years, Copyrighted Works Will Enter the Public Domain http://implode-explode.com/viewnews/2018-12-21_FortheFirstTimeinMoreThan20YearsCopyrightedWorksWillEnterthePubl.html iehi-feed-64488 Fri, 21 Dec 2018 00:36:03 GMT Dow sinks below 23,000; Nasdaq flirts with a bear market; Oil in free fall http://implode-explode.com/viewnews/2018-12-20_Dowsinksbelow23000NasdaqflirtswithabearmarketOilinfreefall.html The latest wave of selling shows how worried investors have become about the eventual demise of the economic expansion. Those jitters were exacerbated by concerns that the Federal Reserve is making a mistake by continuing to raise interest rates.

"Equity markets are quickly approaching the capitulation phase after having broken below critical support," Sam Stovall, chief investment strategist at CFRA Research, told CNN Business.

Market sentiment wasn't helped by a surprise deepening in the budget fight in Washington either. House Speaker Paul Ryan said President Donald Trump won't sign the spending bill needed to prevent a government shutdown. Although a short-term shutdown would not have a large impact on the national economy, it would serve as a reminder of government dysfunction.

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iehi-feed-64487 Thu, 20 Dec 2018 18:54:26 GMT Trump won't sign current funding bill, Ryan says http://implode-explode.com/viewnews/2018-12-20_TrumpwontsigncurrentfundingbillRyansays.html President Donald Trump will not sign the current Senate-passed funding measure that would avert a government shutdown, House Speaker Paul Ryan said Thursday.

What was once a deal to avoid a holiday government shutdown got torpedoed Thursday after conservatives and Trump unleashed fury that the agreement doesn't fully fund a long-promised border wall.

It was a closing burst of wrath in the final days of the Republican-majority House. If Trump cannot secure the $5 billion he is demanding for the wall now, it's unlikely he will see a spending bill that meets his requirement for at least two years as Democrats assume control.

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iehi-feed-64485 Thu, 20 Dec 2018 15:19:05 GMT World stocks suffer as Fed heightens recession fears http://implode-explode.com/viewnews/2018-12-20_WorldstockssufferasFedheightensrecessionfears.html The Fed on Wednesday stuck by a plan to keep withdrawing support from an economy it views as strong, hiking key overnight lending rates, as expected, by 0.25 percent points.

It said "some further gradual" rate hikes would be needed in the year ahead, with policymakers projecting two rises on average next year instead of the three predicted in September.

Although largely in line with expectations, that tweak failed to soothe a cocktail of market fears over slowing world growth, U.S. trade tensions with China, and tightening monetary conditions for companies in the world's biggest economy.

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iehi-feed-64474 Sun, 16 Dec 2018 22:32:07 GMT Cambridge University Study: Speculation of the Death of Bitcoin 'Greatly Exaggerated' http://implode-explode.com/viewnews/2018-12-16_CambridgeUniversityStudySpeculationoftheDeathofBitcoinGreatlyExa.html iehi-feed-64473 Sun, 16 Dec 2018 17:36:49 GMT Doug Noland: The Perils of Inflationism http://implode-explode.com/viewnews/2018-12-16_DougNolandThePerilsofInflationism.html What only weeks ago appeared a rather straightforward meeting is now a pivotal juncture for the Federal Open Market Committee. With low unemployment and relatively robust household and business expenditures, the Fed has been widely expected to raise rates next Wednesday. It may now be a close call. But, then again, the Fed may not yet appreciate the seriousness of what is unfolding in the markets. They're in a real predicament, along with central bankers around the world. They all waited way too long to begin normalizing monetary policy. Today, normalization has barely even commenced, and yet the Bubble they nurtured has already begun to deflate.

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I don't want to imply that resurgent Chinese Credit growth and/or even a more dovish Fed wouldn't matter. I just believe at this point the bursting global Bubble is increasingly beyond resuscitation. A bold statement, I fully appreciate. But Fear is rapidly supplanting greed in "Core" U.S. securities markets. The "Core" has seen de-risking/deleveraging dynamics attain important momentum. Latent "Core" fragilities are being exposed. And the further the global Bubble deflates, the greater the scope of monetary stimulus required to re-energize broad-based securities market inflation. I fully expect more QE. But it will come in a crisis backdrop. I'll presume the first few Trillion or so will, at best, accommodate deleveraging.

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iehi-feed-64470 Fri, 14 Dec 2018 23:41:49 GMT The End of QE Will Always Devolve Into This Sort of Incoherent Mess http://implode-explode.com/viewnews/2018-12-14_TheEndofQEWillAlwaysDevolveIntoThisSortofIncoherentMess.html Draghi claimed today, again the circus, that at some points "QE has been the only driver of this recovery." Even if that statement is true, it can't have been a recovery. The term itself has been so misused, to attempt to reverse engineer some measure of success for the policy.

John Maynard Keynes would be spinning in his grave. Monetary as fiscal policy is supposed to spur the organic processes that then lead to sustained economic growth (pump priming). If it is the only thing moving the economy forward (itself debatable), it has failed on its own terms.

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iehi-feed-64468 Thu, 13 Dec 2018 22:03:31 GMT The Curious Rush To Combine German Banks http://implode-explode.com/viewnews/2018-12-13_TheCuriousRushToCombineGermanBanks.html German officials are laying the groundwork to change the nation's banking laws so that it's two largest banks, really "banks", can more easily combine. If it should ever come to that... DB would have to convert to a holding company triggering revaluation of assets and then the tax consequences of those. Unless, of course, auditing the bank's standing book reveals other malformities taking things in a different direction.

It's not just the rush toward marriage, it's more so who with. DB is both the target and the presumptive acquirer, an already odd situation. And if there is a healthy counterpart to DB's sickening status it's surely not Commerzbank, the institution being whispered up for combination.

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All of these things are related, furthermore connected to Germany's vulnerable external financing requirements ("dollar short"). DB's, as Commerzbank's, declining revenues and overall position indeed have led to a great contribution to the global "dollar shortage." The "dollar short" persists regardless, meaning that rock has met hard place; "funding costs have continued to rise" because these things become self-reinforcing.

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The bank raised significant capital early on in [2014], ostensibly to complete its comeback from the 2008 break. Having been fixed, and compliant with new regulations in full, what did DB's management decide was its best course? Unlike most of its other peers who were actively retreating, Deutsche plunged headlong into the riskiest assets -- global junk, including US corporates as well as US$ EM junk (Eurobonds).

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iehi-feed-64465 Thu, 13 Dec 2018 05:28:57 GMT Speaker Paul Ryan retires: his legacy is debt and disappointment http://implode-explode.com/viewnews/2018-12-13_SpeakerPaulRyanretireshislegacyisdebtanddisappointment.html House Speaker Paul Ryan's legacy can be summed up in just one number: $343 billion. That's the increase between the deficit for fiscal year 2015 and fiscal year 2018 -- that is, the difference between the fiscal year before Ryan became speaker of the House and the fiscal year in which he retired.

... now, as Ryan prepares to leave Congress, it is clear that his critics were correct and a credulous Washington press corps -- including me -- that took him at his word was wrong. In the trillions of long-term debt he racked up as speaker, in the anti-poverty proposals he promised but never passed, and in the many lies he told to sell unpopular policies, Ryan proved as much a practitioner of post-truth politics as Donald Trump.

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The first [betrayal] is the 2017 tax cut Ryan passed but didn't pay for. His defenders note that early drafts of the tax cut bill included a border adjustment tax that would've made the package revenue-neutral, fulfilling Ryan's promises. But that policy fell out of the legislation early on, and rather than replace it, Ryan pushed a plan that added $1.5 trillion to the national debt over 10 years, and used accounting gimmicks to hide vastly larger increases tucked into the legislation's long-term design. Now House Republicans, still under Ryan's leadership, are agitating to make the tax cuts permanent, with a 20-year cost estimated at $4 trillion.

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The second is the spending Ryan passed but didn't pay for. Years of fiscal irresponsibility have sometimes permitted Republicans to be graded on a curve, where tax cuts can be charged to the national credit card and spending cuts are the true measure of policy steel. But even on this diminished measure, Ryan's record betrayed his promises.

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The third is the expansion of the earned income tax credit Ryan proposed but never even tried to pass. After the 2010 election, he went on a much-vaunted tour of American poverty, racking up positive press for expanding the boundaries of the possible under conservatism, and arguing for an enlarged EITC that would help childless adults.

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"When we tried to get it into a negotiation, he refused," says Jason Furman, who served as Obama's chief economist. "It wasn't in his tax plan. In $1.5 trillion in tax cuts, he somehow couldn't find space for this $60 billion item. It's just amazing."

... In important ways, Trump is not a break from the Republican Party's recent past but an acceleration of it. A party that acculturates itself, its base, and its media sphere to constant nonsense can hardly complain when other political entrepreneurs notice that nonsense sells and decide to begin marketing their own brand of flimflam.

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iehi-feed-64460 Tue, 11 Dec 2018 05:04:13 GMT Forbes: Trump appears to be swindling his campaign contributors for profit http://implode-explode.com/viewnews/2018-12-11_ForbesTrumpappearstobeswindlinghiscampaigncontributorsforprofit.html iehi-feed-64437 Sat, 01 Dec 2018 22:55:27 GMT Analysis: Trump "Sugar High" Economy Set to Fade Fast http://implode-explode.com/viewnews/2018-12-01_AnalysisTrumpSugarHighEconomySettoFadeFast.html "In the US, the double dose of caffeine from tax cuts and spending increases is already starting to wear off," Ethan Harris and Aditya Bhave of the BAML team wrote. At the same time, the US is expected to get hit with growing headwinds from Trump's continued trade war with China and the Federal Reserve's interest rate hikes.

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There are already signs that the boost from the tax cuts are fading and they could become more obvious next year, JPMorgan's economists said. They cited the slowdown in capital investment from corporations, for instance.

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As Business Insider's Will Martin reported, Carpenter thinks the trade war could actually drag GDP growth below 2% as early as the fourth quarter of 2018.

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iehi-feed-64435 Thu, 29 Nov 2018 20:08:19 GMT We're Racing Toward a "Global Debt Bomb" http://implode-explode.com/viewnews/2018-11-29_WereRacingTowardaGlobalDebtBomb.html In the last 15 years, worldwide debt has more than doubled, up by nearly $150 trillion. And the Institute of International Finance warned this past July that global debt rose the most in two years, by $8 trillion in the first quarter of this year, reaching an astounding $247 trillion.

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In the United States, the country's debt has grown so large that people cannot wrap their heads around it. As it stands this week, the country is on the hook for a staggering $21.79 trillion -- with a "t." And even if nothing else happens in the economy, it will grow $310 billion per year just on the interest owed alone.

But things do happen in the economy, and in fiscal 2018, the budget deficit of $779 billion added that much to the total bill. If interest rates keep inching higher, the amount owed on the debt will get larger and larger until it crowds out other necessary spending.

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[And yet,] central banks are already handcuffed with what they can do to combat future economic problems. They will be unable to handle the global debt bomb when it finally arrives.

The bond market is not helping, either. While the Fed grapples with its short-term interest rate policies, the bond market, which controls long-term interest rates, is already in a bear market. In other words, interest rates on Treasury notes, mortgages, and long corporate bonds are already rising significantly.

For example, the rate on the benchmark 10-year Treasury rallied from 2.06% in September of last year to its current 3.06%. That ... is a 50% increase in just 14 months...

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