Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-64738 Fri, 24 May 2019 17:04:52 GMT The Economy is Stagnant, Not "Booming" http://implode-explode.com/viewnews/2019-05-24_TheEconomyisStagnantNotBooming.html President Trump likes to brag about the supposedly booming economy. So do other Republican politicians. Some journalists have gotten into the habit too, exaggerating the strength of the economic expansion, because it makes for a good story. Here's the truth: There is no boom. The economy has been mired in an extended funk since the financial crisis ended in 2010. G.D.P. growth still has not reached 3 percent in any year, and 3 percent isn't a very high bar.

Last week, while attending an economics conference in Washington, I discovered one particularly clear sign of the economy's struggles -- namely, that it keeps performing worse than the experts have predicted.

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Over time, the differences between the experts' predictions and the economy's performance have added up. The American economy would be about 6 percent larger today -- producing $1.3 trillion more in goods and services this year -- if the forecasts had come true. And for most families, real-life experience has been more disappointing than the G.D.P. numbers, because much of the bounty of the economy's growth has flowed to the affluent.

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The 2017 Trump tax [was] is a dreadful piece of economic policy -- essentially a giant effort to aggravate income inequality. Tax cuts that benefit the wealthy most are huge and permanent. Tax cuts focused on everyone else are smaller and temporary... A better policy response would start with a tax cut focused on the majority of Americans, not the wealthy. And there are many other ways to take on secular stagnation... Infrastructure projects, to jump-start investment. The retirement of coal-fired power plants, which would also lead to new investment. Stronger safety-net programs, including Social Security, to reduce the savings glut. More aggressive antitrust policies, to combat monopolies. And a Federal Reserve that, at long last, stopped making the same mistake -- of overestimating both growth and inflation.

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iehi-feed-64725 Sun, 19 May 2019 20:37:01 GMT WeWork Wants to Become Its Own Landlord With Latest Spending Spree http://implode-explode.com/viewnews/2019-05-19_WeWorkWantstoBecomeItsOwnLandlordWithLatestSpendingSpree.html Neumann says only two things are holding his company back: "Cash," he says, pausing for a beat of suspense, "and space." In addition to SoftBank tightening its spigot, some buildings with WeWork as a major tenant have had trouble getting bank loans. And some landlords have grown leery of leasing much more space to Neumann, afraid of what terms he might be able to negotiate. He says alternative sources of funding and real estate can pick up the slack.

Now, after more than a year of planning, WeWork is creating an investment fund that aims to raise billions of dollars to buy stakes in buildings where it will be a major tenant. If all goes according to plan, the fund, called ARK, will start with $2.9 billion, including $1 billion from Canadian real estate investor Ivanhoé Cambridge Inc. WeWork has long said it mostly stuck to leasing space because it believed in being "asset-light." Now it's wagering that buildings become more valuable with WeWorks in them, in which case ARK will put more of that added value back in the company's own pocket.

The fund's pitch to investors revolves around the relative safety of a real estate play with a large tenant in hand. It also depends on a gut-level faith in WeWork's vibes. Sylvain Fortier, Ivanhoé Cambridge's chief investment and innovation officer, says the company's strength is what he calls a "recipe." "People actually want to be in the office, actually want to be together. They feel a little bit like home," Fortier says. "I bet you that sooner rather than later, a WeWork-branded building will be attracting other tenants the same way you will never have a vacant space next to an Apple Store."

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ARK won't exactly put to rest concerns about conflicts of interest. "The question will be, what happens when the interests of the limited partners diverge from the interest of WeWork?" says Charles Elson, a corporate governance professor at the University of Delaware. "The more complicated structures someone comes up with, the more difficult it is to explain."

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iehi-feed-64722 Sun, 19 May 2019 17:11:35 GMT Deutsche Bank Suppressed Trump, Kushner Money Laundering Alarms; Fired Whistleblower http://implode-explode.com/viewnews/2019-05-19_DeutscheBankSuppressedTrumpKushnerMoneyLaunderingAlarmsFiredWhis.html Anti-money laundering specialists at Deutsche Bank recommended in 2016 and 2017 that multiple transactions involving legal entities controlled by Donald J. Trump and his son-in-law, Jared Kushner, be reported to a federal financial-crimes watchdog.

The transactions, some of which involved Mr. Trump's now-defunct foundation, set off alerts in a computer system designed to detect illicit activity, according to five current and former bank employees. Compliance staff members who then reviewed the transactions prepared so-called suspicious activity reports that they believed should be sent to a unit of the Treasury Department that polices financial crimes.

But executives at Deutsche Bank, which has lent billions of dollars to the Trump and Kushner companies, rejected their employees' advice. The reports were never filed with the government.

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Ms. McFadden [a longtime anti-money laundering specialist in Deutsche Bank's Jacksonville office] said she was terminated last year after she raised concerns about the bank's practices. Since then, she has filed complaints with the Securities and Exchange Commission and other regulators about the bank's anti-money-laundering enforcement.

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Ms. McFadden said she had reviewed the transactions and found that money had moved from Kushner Companies to Russian individuals. She concluded that the transactions should be reported to the government -- in part because federal regulators had ordered Deutsche Bank, which had been caught laundering billions of dollars for Russians, to toughen its scrutiny of potentially illegal transactions.

... Typically, such a report would be reviewed by a team of anti-money laundering experts who are independent of the business line in which the transactions originated -- in this case, the private-banking division -- according to Ms. McFadden and two former Deutsche Bank managers.

That did not happen with this report. It went to managers in New York who were part of the private bank, which caters to the ultrawealthy. They felt Ms. McFadden's concerns were unfounded and opted not to submit the report to the government, the employees said.

Ms. McFadden and some of her colleagues said they believed the report had been killed to maintain the private-banking division's strong relationship with Mr. Kushner.

After Mr. Trump became president, transactions involving him and his companies were reviewed by an anti-financial crime team at the bank called the Special Investigations Unit. That team, based in Jacksonville, produced multiple suspicious activity reports involving different entities that Mr. Trump owned or controlled, according to three former Deutsche Bank employees who saw the reports in an internal computer system.

Some of those reports involved Mr. Trump's limited liability companies. At least one was related to transactions involving the Donald J. Trump Foundation, two employees said.

Deutsche Bank ultimately chose not to file those suspicious activity reports with the Treasury Department, either, according to three former employees. They said it was unusual for the bank to reject a series of reports involving the same high-profile client.

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iehi-feed-64719 Fri, 17 May 2019 18:38:48 GMT Trump in His Own Private Slump (EXCEPT FOR EMOLUMENTS!!) http://implode-explode.com/viewnews/2019-05-17_TrumpinHisOwnPrivateSlumpEXCEPTFOREMOLUMENTS.html President Trump's family business saw its overall revenues decline modestly in 2018, according to his annual financial report released Thursday, suggesting a disconnect between the Trump brand and the still-growing national economy.

The revenue declines were most pronounced at some of Mr. Trump's best-known properties, including the Mar-a-Lago resort in Florida, which experienced a nearly 10 percent drop. Hotels in Chicago and Hawaii, as well as golf courses in Los Angeles, Philadelphia and the Bronx, also saw declines, suggesting that sales are being affected by consumers deciding to turn away from the Trump brand, industry analysts said.

The results were somewhat better for the Trump International Hotel in Washington, which has become a favored spot for Republicans, lobbyists and some foreign governments and accounts for nearly 10 percent of the Trump Organization's revenues.

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That retrenchment appears driven mostly by political factors, given that the economy has been relatively strong for the past several years. Mr. Trump's polarizing policies and increasingly intense clashes with Democrats have turned off some potential customers and clients, particularly in heavily Democratic cities like Chicago.''

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iehi-feed-64717 Wed, 15 May 2019 23:44:39 GMT The Real Motivation for FacebookCoin http://implode-explode.com/viewnews/2019-05-15_TheRealMotivationforFacebookCoin.html what better way to pacify government bureaucrats than to "share" profits with users... And the easiest way for Facebook to do that is with its own currency.

That's what FacebookCoin is all about... Simply put, Facebook is trying to save its own skin... by getting VC firms involved with FacebookCoin, it will claim that the project is decentralized and not solely controlled by Facebook. It's just a clever front to deflect scrutiny.

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Facebook has been lobbying for additional government regulations on social media. That way, Facebook doesn't have to self-police -- it can simply follow orders. That also allows it to deflect public backlash.

If that doesn't work, Facebook has [its FacebookCoin play]...

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iehi-feed-64711 Fri, 10 May 2019 21:10:38 GMT Uber Drives Into a Ditch for its IPO http://implode-explode.com/viewnews/2019-05-10_UberDrivesIntoaDitchforitsIPO.html ``Shares of Uber fell more than 7% on its first day of trading Friday, marking a rocky Wall Street debut for a company that endured plenty of bumps on its long road to going public. Uber opened at $42 a share, below its IPO price of $45, and ended the day even lower at $41.57.

That disappointing first day performance sets Uber apart from the vast majority of its tech peers. In the past five years, only 10% of venture capital-backed US technology IPOs finished the first day in the red, according to data provided to CNN Business from Renaissance Capital, which manages IPO-focused exchange-traded funds.

Uber did succeed in raising $8.1 billion in one of the largest public offerings ever, a substantial war chest that should fund the company's expansion into new cities and service categories. But that amount was still at the low end of what Uber originally set out to raise.

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shares in Lyft fell below their IPO price on their second day of trading and have continued to tumble since. The stock is now down about 25% from the IPO price... tech companies that have come to market in recent years with massive losses -- including Lyft and Snap -- are currently "not trading above their IPO price."

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iehi-feed-64710 Wed, 08 May 2019 22:57:51 GMT Cost of living between 2000 and 2019: Inflation has played a big part in shrinking the American middle class http://implode-explode.com/viewnews/2019-05-08_Costoflivingbetween2000and2019Inflationhasplayedabigpartinshrink.html iehi-feed-64709 Wed, 08 May 2019 19:56:58 GMT Donald Trump's emperor-has-no-clothes moment on his wealth is here http://implode-explode.com/viewnews/2019-05-08_DonaldTrumpsemperorhasnoclothesmomentonhiswealthishere.html Put plainly: The story that Donald Trump has been telling himself and the American public for much of his life -- and especially since becoming a presidential candidate in 2015 -- isn't true. And it's more than an exaggeration. It's the opposite of what happened. Trump was gifted huge amounts of money by his father. He lost it at eye-popping rates.

Will any of this matter to Trump's supporters or, more broadly, to the 2020 electorate? Probably not. Minds have been made up -- on both sides -- about Trump for a very long time. Facts and reality don't seem to puncture those opinions about the President.

But whether voters vote on this issue next November is, really, beside the point. And the point is this: Donald Trump is not the person he sold himself to be to the American public in 2016. Period.

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iehi-feed-64708 Wed, 08 May 2019 03:52:34 GMT Fraud Prince: Leaked Trump Tax Figures Show Over $1 Billion in Business Losses Thru '94 http://implode-explode.com/viewnews/2019-05-07_FraudPrinceLeakedTrumpTaxFiguresShowOver1BillioninBusinessLosses.html By the time his master-of-the-universe memoir "Trump: The Art of the Deal" hit bookstores in 1987, Donald J. Trump was already in deep financial distress, losing tens of millions of dollars on troubled business deals, according to previously unrevealed figures from his federal income tax returns.

Mr. Trump was propelled to the presidency, in part, by a self-spun narrative of business success and of setbacks triumphantly overcome. He has attributed his first run of reversals and bankruptcies to the recession that took hold in 1990. But 10 years of tax information obtained by The New York Times paints a different, and far bleaker, picture of his deal-making abilities and financial condition.

The data -- printouts from Mr. Trump's official Internal Revenue Service tax transcripts, with the figures from his federal tax form, the 1040, for the years 1985 to 1994 -- represents the fullest and most detailed look to date at the president's taxes, information he has kept from public view. Though the information does not cover the tax years at the center of an escalating battle between the Trump administration and Congress, it traces the most tumultuous chapter in a long business career -- an era of fevered acquisition and spectacular collapse.

The numbers show that in 1985, Mr. Trump reported losses of $46.1 million from his core businesses -- largely casinos, hotels and retail space in apartment buildings. They continued to lose money every year, totaling $1.17 billion in losses for the decade.

In fact, year after year, Mr. Trump appears to have lost more money than nearly any other individual American taxpayer, The Times found...

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Mr. Trump was able to lose all that money without facing the usual consequences -- such as a steep drop in his standard of living -- in part because most of it belonged to others, to the banks and bond investors who had supplied the cash to fuel his acquisitions. And as The Times's earlier investigation showed, Mr. Trump secretly leaned on his father's wealth to continue living like a winner and to stage a comeback.

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The new information also suggests that Mr. Trump's 1990 collapse might have struck several years earlier if not for his brief side career posing as a corporate raider. From 1986 through 1988, while his core businesses languished under increasingly unsupportable debt, Mr. Trump made millions of dollars in the stock market by suggesting that he was about to take over companies. But the figures show that he lost most, if not all, of those gains after investors stopped taking his takeover talk seriously.

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the president has filed lawsuits against his banks and accounting firm to prevent them from turning over tax returns and other financial records.

In New York, the attorney general's office is investigating the financing of several major Trump Organization projects; Deutsche Bank has already begun turning over documents. The state attorney general is also examining issues raised last year by The Times's investigation, which revealed that much of the money Mr. Trump had received from his father came from his participation in dubious tax schemes, including instances of outright fraud.

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At his nadir, in the post-recession autumn of 1991, Mr. Trump testified before a congressional task force, calling for changes in the tax code to benefit his industry.

"The real estate business -- we're in an absolute depression," Mr. Trump told the lawmakers, adding: "I see no sign of any kind of upturn at all. There is no incentive to invest. Everyone is doing badly, everyone."

... [But] While Donald Trump reported hundreds of millions of dollars in losses for 1990 and 1991, Fred Trump's returns showed a positive income of $53.9 million, with only one major loss: $15 million invested in his son's latest apartment project.

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iehi-feed-64707 Wed, 08 May 2019 00:38:09 GMT Reform capitalism or face revolution, billionaires are told at Milken Conference http://implode-explode.com/viewnews/2019-05-07_ReformcapitalismorfacerevolutionbillionairesaretoldatMilkenConfe.html If the barricades have not been erected in the streets, they were told several times over, they could soon be unless there is reform of the American economic system.

"It's not whether we should be capitalist or socialist. It's how do we make sure that capitalism is working the way it has in the past," said Alan Schwartz, a managing partner at global investment firm Guggenheim Partners, who warned of "class warfare."

He noted that salaries and wages as a percentage of the economic pie are at a postwar low of 40%, prompting a "throw out the rich" mentality that would require some form of income redistribution to head off.

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Niall Ferguson, a senior fellow at the conservative Hoover Institution at Stanford University, said that when young people say they favor socialism what they really mean is simply a bigger role for government.

"There's evidence they really don't know what socialism is," he said, pointing out how his students seem to admire European social democracies, which are nonetheless capitalist.

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... it was telling that Milken hosted the conference's last discussion, titled "Keeping the American Dream Alive" and featuring Ray Dalio, who built his Bridgewater Associates into one of the world's largest hedge funds with some $150 billion under management.

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He returned to that theme in his talk, asserting that lack of income growth among the bottom 60% of the population had led to a loss of hope reflected in rising death rates linked to suicides and opiate abuse.

Dalio contrasted that with the New Frontier years of the Kennedy administration, when the nation thought it could eliminate poverty and set a goal to reach the moon. "I think that is the magic of the United States and we are losing that," he said.

It was hard to say that any comprehensive concrete solutions emerged out of the discussion, though there was much talk about the need to improve educational opportunities in lower-income neighborhoods.

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iehi-feed-64704 Sun, 05 May 2019 21:39:01 GMT Facebook Building Cryptocurrency-Based Payments System http://implode-explode.com/viewnews/2019-05-05_FacebookBuildingCryptocurrencyBasedPaymentsSystem.html One idea under discussion is Facebook paying users fractions of a coin when they view ads, interact with other content or shop on its platform--not unlike loyalty points accrued at retailers, some of the people said.

This would reward the kind of genuine interaction that Facebook, beset by bots and hate speech, has been trying to encourage. It could also blunt criticism that the company makes billions of dollars on the backs of its users, sometimes in troubling or invasive ways.

Creating a so-called stablecoin backed by government currency better positions it as a legitimate payment method rather than a speculative bet. The volatility of bitcoin and other cryptocurrencies that aren't backed by hard assets has hampered their usefulness in payments.

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Now Facebook must bend a variety of stakeholders to its vision. Most immediately are Visa and Mastercard Inc., whose networks handle the vast majority of credit and debit card payments in the U.S.

If it succeeds, the project threatens the card networks' dominance over global payments. Facebook comes armed with more than 1.5 billion daily users, many of them in developing countries where social-media sites provide the backbone of internet commerce.

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iehi-feed-64702 Sun, 05 May 2019 00:47:04 GMT Sullivan & Cromwell's Rodge Cohen: The Untold Story of the Fed's $29 Trillion (NOT $17T) Bailout http://implode-explode.com/viewnews/2019-05-04_SullivanCromwellsRodgeCohenTheUntoldStoryoftheFeds29TrillionNOT1.html "The enacted 1991 amendment to Section 13(3) authorized the Fed to make emergency loans to nonbanking firms as long as those loans are ‘secured to the satisfaction of the [Fed],' and the amendment also gave the Fed broad discretion to accept almost any type of collateral from the borrowing firms."

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During Cohen's interview with the FCIC, he is asked if the Fed's financial assistance with Bear was the first time the Fed had used its 13(3) authority to help a nonbank. Cohen states that "To my knowledge it is the first time and the initial but fleeting reaction was we've never done it before, what sort of precedent are we creating for ourselves."

It was not the first time the Fed had used 13(3) to assist a nonbank. It was simply the first time the Fed had showered money like a drunken sailor with an unlimited ATM card to the Fed's discount window. According to a history provided by David Fettig, a Senior Advisor to the Minneapolis Fed, Section 13(3) "was used sparingly, and just 123 loans were made" from 1932 to 1936. The loans totaled $1.5 million -- that's $27.3 million in today's dollars. The 1936 loans were the last time 13(3) was invoked until 2007.

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iehi-feed-64700 Fri, 03 May 2019 21:25:10 GMT April jobs: Unemployment rate falls to the lowest since 1969, But not-in-workforce surge to fresh high http://implode-explode.com/viewnews/2019-05-03_ApriljobsUnemploymentratefallstothelowestsince1969Butnotinworkfo.html While last month's slump in the jobless rate came with strong increase in hiring, it also was helped along by a sharp decline in the labor force of 490,000. That brought the labor force participation rate down to 62.8%, exactly where it was a year ago.

A broader unemployment gauge that includes those who have quit looking for jobs as well as the underemployed held at 7.3%, where it has been since February.

Those counted as not in the labor force surged by 646,000 to a fresh high of 96.2 million.

"Leaving aside month-to-month fluctuations, the labor market is still very strong, adding almost double the number of workers needed to keep pace with new entrants to the labor force in any given month," said Eric Winograd, AllianceBernstein's senior economist. "Wages may have been slightly tepid this month relative to expectations but are still growing at just about the highest rate this cycle, and the unemployment rate is at multi-generational lows."

The level of unemployed people plunged by 387,000 in April, bringing the total level to 5.8 million. However, the ranks of the employed also declined by 103,000, according to the Labor Department's household survey.

This is what counts as an extremely bullish report these days... amazing.

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iehi-feed-64697 Thu, 02 May 2019 19:10:45 GMT How a Little Money Laundering Can Have a Big Impact on Real Estate Prices | Wolf Street http://implode-explode.com/viewnews/2019-05-02_HowaLittleMoneyLaunderingCanHaveaBigImpactonRealEstatePricesWolf.html iehi-feed-64689 Thu, 18 Apr 2019 21:17:45 GMT Seth Meyers Rants At Elites and Political Dysfunction (4/17/19) http://implode-explode.com/viewnews/2019-04-18_SethMeyersRantsAtElitesandPoliticalDysfunction41719.html iehi-feed-64687 Wed, 17 Apr 2019 23:22:23 GMT Dow, S&P 500 and Nasdaq near records but stock-market volumes are the lowest in months -- Here's why http://implode-explode.com/viewnews/2019-04-17_DowSP500andNasdaqnearrecordsbutstockmarketvolumesarethelowestinm.html the recent resurgence for stocks after a more than six-month, corrective hiatus has many market participants questioning its durability, as trading volumes remain near the lowest levels of 2019.

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Some make the case that the dearth in trading activity reflects a lack of participation in the market by a broad swath of investors.

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iehi-feed-64677 Thu, 11 Apr 2019 14:52:53 GMT Trump Says U.S. Is Full, but Demographic Decline Is Real Threat http://implode-explode.com/viewnews/2019-04-11_TrumpSaysUSIsFullbutDemographicDeclineIsRealThreat.html iehi-feed-64676 Thu, 11 Apr 2019 13:13:42 GMT HGTV Star Nicole Curtis Facing Foreclosure On Two Houses http://implode-explode.com/viewnews/2019-04-11_HGTVStarNicoleCurtisFacingForeclosureOnTwoHouses.html iehi-feed-64673 Wed, 10 Apr 2019 22:20:49 GMT Vice President Mike Pence backs Trump's call to lower interest rates (DESPITE "BULLISH" ECONOMY) http://implode-explode.com/viewnews/2019-04-10_VicePresidentMikePencebacksTrumpscalltolowerinterestratesDESPITE.html iehi-feed-64669 Mon, 08 Apr 2019 14:35:28 GMT Ray Dalio: Capitalism's Income Inequality Is (The Real) National Emergency http://implode-explode.com/viewnews/2019-04-08_RayDalioCapitalismsIncomeInequalityIsTheRealNationalEmergency.html While President Donald Trump is focused on the national emergency he's declared to secure the southern U.S. border, the billionaire founder of the world's biggest hedge fund is more worried about losing the American dream.

Capitalism must be reformed because it's not producing enough opportunities for most Americans, creating an income gap that threatens to spark conflict, Ray Dalio, the Bridgewater Associates co-chairman, said in an interview airing Sunday on CBS's "60 Minutes."

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Dalio, expressed similar sentiments in an essay posted April 4 on LinkedIn. He pointed to statistics including that the bottom 60 percent of income-earners in the U.S. keep falling further behind the top 40 percent -- and that the percentage of children who grow up to earn more than their parents has fallen to 50 percent today from 90 percent in 1970.

The income gap is about as high as ever, and the wealth gap is the highest since the late 1930s because the wealth of the top 1 percent of the population is more than that of the bottom 90 percent combined, Dalio said.

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