Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-64029 Fri, 15 Jun 2018 23:05:55 GMT The court's decision to let AT&T and Time Warner merge is ridiculously bad http://implode-explode.com/viewnews/2018-06-15_ThecourtsdecisiontoletATTandTimeWarnermergeisridiculouslybad.html The decision surprised almost everyone -- not necessarily that AT&T and Time Warner had won, but that Judge Leon allowed the merger to go through with no conditions or prohibitions on their behavior at all. In fact, Judge Leon's opinion seems downright excited for the two companies, while systematically discounting the government's case at every turn. Honestly, it's a little strange.

... from the jump, it's pretty clear Judge Leon thinks AT&T's ideas about the future of content are pretty good, while the DOJ's complaints about antitrust are pretty boring...

In a country where net neutrality has just been repealed, owning the internet connection is a huge advantage, just like owning the cable network would be. All of this is, of course, extremely obvious to anyone who has used a phone to watch anything in the past decade. It's not clear how Judge Leon thinks any of this actually works, or if he realizes AT&T is the country's largest wireless internet provider...

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iehi-feed-64028 Fri, 15 Jun 2018 22:56:54 GMT Cryptocurrency Manipulation Study Is Underwhelming http://implode-explode.com/viewnews/2018-06-15_CryptocurrencyManipulationStudyIsUnderwhelming.html iehi-feed-64023 Fri, 15 Jun 2018 14:10:12 GMT Trump Hits China With Tariffs On $50 Billion Of Goods; China Says It Will Retaliate http://implode-explode.com/viewnews/2018-06-15_TrumpHitsChinaWithTariffsOn50BillionOfGoodsChinaSaysItWillRetali.html iehi-feed-64020 Fri, 15 Jun 2018 00:36:28 GMT Trump Foundation lawsuit: How Donald Trump took transactional philanthropy to its illegal extreme http://implode-explode.com/viewnews/2018-06-14_TrumpFoundationlawsuitHowDonaldTrumptooktransactionalphilanthrop.html Donald Trump ignored all [the relevant legal] distinctions, and Thursday's complaint has countless examples, from both business and politics. In January 2016, the Trump Foundation handed over some $2.82 million directly to Trump campaign staff, for them to disburse as they saw fit; those donations were specifically targeted to states with upcoming primaries where Trump was running as a candidate... the money had been donated by the public for veterans; it was not even Trump's personal money. People thought they were donating to veterans, but really that money went to Trump campaign stunts.

That example isn't murky at all; it's illegal. Charitable foundations are not allowed to engage in political activities, period. But in Trump's mind, the Trump Foundation was never really a charitable foundation, created for acts of selfless generosity. Instead, it was little more than a money-laundering machine: Donors with their own ulterior motives could give tax-deductible donations to the foundation, and then in turn the foundation would be used whenever Trump wanted to funnel money to a nonprofit.

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The New York attorney general's 41-page complaint is detailed and compelling: The Trump Foundation was a Trump Organization slush fund; it wasn't a genuinely charitable endeavor. Most foundations are much more careful to have proper board oversight and to comply with all applicable nonprofit law. After all, if you're rich enough to set up a foundation, you're rich enough to set it up properly.

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iehi-feed-64015 Mon, 11 Jun 2018 19:27:19 GMT The real opportunities in cryptocurrency... aren't cryptocurrencies http://implode-explode.com/viewnews/2018-06-11_Therealopportunitiesincryptocurrencyarentcryptocurrencies.html ... in all likellihood, reports of cryptocurrencies' death have been greatly exaggerated. Governments almost always regulate technology-- automobiles, radio, television, the Internet. And while regulations often create unnecessary costs and inconveniences, they haven't stopped the overall rise of these important technologies.

Crypto will likely be the same. It's too mainstream to kill off, and the SEC needs to show the world that they embrace innovation. Plus, there are too many mega-corporations that have been investing heavily in their own blockchains and distributed ledger technology (DLT), and those companies have far too much political clout to be shut down by the SEC.

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If anything, that's the real threat to most of the tokens and cryptocurrencies that exist today-- the rapid advancement of the technology itself.

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iehi-feed-64012 Sun, 10 Jun 2018 17:32:59 GMT The "Trump Tax Cut" Numbers Are Starting to Trickle In -- and They're Not Good... http://implode-explode.com/viewnews/2018-06-10_TheTrumpTaxCutNumbersAreStartingtoTrickleInandTheyreNotGood.html While we cannot accurately adjust for the impact of the tax change in year to year comparisons, it is clear that, so far, the tax cuts apparently are not acting as stimulus. Year to year revenue growth is running well below pre-tax cut levels. The growth rate is fluctuating between -4% and +2%, whereas prior to the tax cut the growth rate was +2% to +10%.

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[While the drop in tax collections is also] economic stimulus and it means that the top line economic data numbers will continue to run hot... the drop in revenue also means that the deficit has increased. That translates to more government borrowing. More borrowing means more Treasury supply. That must come out of the accounts of dealers and investors. The Fed is no longer a buyer. It's pulling money out of the markets.

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While the effects haven't been clear yet in terms of lower stock prices, the time is coming. This is no time to be chasing stocks.

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iehi-feed-64011 Sun, 10 Jun 2018 17:30:34 GMT Trump Dynamites G7 Meeting in 11th Hour (SO MUCH FOR TARIFF-FREE G7!!) http://implode-explode.com/viewnews/2018-06-10_TrumpDynamitesG7Meetingin11thHourSOMUCHFORTARIFFFREEG7.html The president's outburst had been foreshadowed for days leading up to the Canada summit, with Mr. Trump and his counterparts trading sharp-edged barbs that included threats of punches and counterpunches on tariffs. President Emmanuel Macron of France accused Mr. Trump of being willing to remain isolated from the world.

That was followed by 48 hours of tense and often confrontational closed-door discussions between Mr. Trump and the leaders of America's closest allies -- France, Britain, Canada, Japan, Italy and Germany -- in the hopes of resolving a brewing trade war among friends.

Instead, the gathering apparently served to further inflame Mr. Trump's belief that the United States is being treated unfairly by countries with which prior presidents had long ago negotiated trade agreements for the flow of goods and services.

The result was a slow-rolling collapse of the fragile alliances that officials at the summit -- and even Mr. Tump's own White House advisers -- insisted throughout the day could be maintained in the face of fundamental disagreements.

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Earlier in the day, before Mr. Trump left the summit, he brought up the dramatic prospect of completely eliminating tariffs on goods and services, even as he threatened to end all trade with them if they didn't stop what he said were unfair trade practices.

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iehi-feed-64007 Fri, 08 Jun 2018 22:01:37 GMT Ben Bernanke Predicts Crash in 2020 http://implode-explode.com/viewnews/2018-06-08_BenBernankePredictsCrashin2020.html "What you are getting is a stimulus at the very wrong moment," Bernanke said at the American Enterprise Institute, a Washington think tank, Bloomberg reported Thursday. "The economy is already at full employment."

Stimulus packages are used when the economy is flagging. When the economy does slump in the future, there may be few reserves to spend to get it going again. Bernanke predicted a "Wile E. Coyote" moment when the fallout hits, referring to the endlessly failing character in the "Road Runner" cartoons.

The stimulus "is going to hit the economy in a big way this year and next year, and then in 2020, Wile E. Coyote is going to go off the cliff," Bernanke warned.

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iehi-feed-64000 Fri, 08 Jun 2018 00:25:41 GMT Starbucks Coffee Quietly Raises Prices--Again (NO INFLATION HERE...) http://implode-explode.com/viewnews/2018-06-07_StarbucksCoffeeQuietlyRaisesPricesAgainNOINFLATIONHERE.html iehi-feed-63990 Mon, 04 Jun 2018 02:10:48 GMT Feds Move To Seize 2 NXIVM Sex Cult Houses In Upstate NY http://implode-explode.com/viewnews/2018-06-03_FedsMoveToSeize2NXIVMSexCultHousesInUpstateNY.html iehi-feed-63988 Sat, 02 Jun 2018 14:44:48 GMT Record 95.9 Million Americans Are No Longer In The Labor Force http://implode-explode.com/viewnews/2018-06-02_Record959MillionAmericansAreNoLongerInTheLaborForce.html ... in May, the number of people not in the labor force increased by another 170K, rising to 95.915 million, a new all time high... Adding to this the 6.1 million currently unemployed Americans, there are 102 million Americans who are either unemployed or out of the labor force (and it is also worth noting that of those employed 26.9 million are part-time workers).

In other words, contrary to prevailing economist groupthink, there is a lot of slack in the economy, and if as the latest Beige Book revealed, employers are now hiring drug addicts and felons to make up for the shortage of qualified candidates, a long time will be pass before wages see significant gains.

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iehi-feed-63987 Sat, 02 Jun 2018 14:41:50 GMT The US economy suddenly looks like it's unstoppable (BUT TRADE IS THE SPECTRE THAT HAUNTS...) http://implode-explode.com/viewnews/2018-06-02_TheUSeconomysuddenlylookslikeitsunstoppableBUTTRADEISTHESPECTRET.html The White House's decision this week to forge ahead with steel and aluminum tariffs stoked fears that the administration could be its own worst enemy on the road to 3 percent-plus growth. While the tariffs themselves are expected to have minimal economic impact on their own, fears remain that they could spark retaliatory measures and, ultimately, an all-out trade war.

Exports make up just 12.4 percent of the U.S. economy, but S&P 500 companies generate about 43 percent of their sales internationally. That's why markets tend to recoil every time the administration saber rattles about tariffs.

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iehi-feed-63985 Sat, 02 Jun 2018 11:50:40 GMT Trump May Have Brokered Massive, Sanctions-Violating Oil Deal In Russian Quid-Pro-Quo http://implode-explode.com/viewnews/2018-06-02_TrumpMayHaveBrokeredMassiveSanctionsViolatingOilDealInRussianQui.html Evidence strongly indicates that President Donald J. Trump and his campaign associates brokered a massive oil privatization deal, where his Organization facilitated a global financial transaction to sell Russian Oil stock to its Syrian War adversary, the Emirate of Qatar... The end result allowed Russia to trade stolen emails to help to Donald Trump's election campaign (as well as that of many Republican Congressmen), in exchange for help circumventing American sanctions to transact the sale of Rosneft, which Putin desperately needed to finance his budget deficit.

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Carter Page met with Rosneft in December to assist with the deal, and he's on the record admitting it but claims he didn't meet Igor Sechin," said Dworkin incredulously... mighty brokerage fee to one of the Trump campaign advisors, Moscow-based investment banker Carter Page, is highlighted in the former MI-6 operative's report.

Theoretically, the former Merrill Lynch investment banker, Page, may have only been the "bag man" or go-between and someone else is the recipient of the cash premium in the dossier. Five hundred million dollars is a lot of money, and conceivably, many members of the Trump Organization, or family, could be involved in a deal of that scope.

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Nineteen and a half percent of Rosneft's stock was agreed to be transferred on December 7th, before the board was informed of the transaction's terms only after it took place.

The "matryoshka" (named after the famous nesting dolls) or complex deal structure is most likely designed to avoid American sanctions imposed over the Ukraine invasion against Rosneft, its CEO Igor Sechin, and its parent company Gazprom.

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iehi-feed-63971 Sat, 26 May 2018 17:04:17 GMT ForSaleByOwner.com Bought By Quicken Loans Owner http://implode-explode.com/viewnews/2018-05-26_ForSaleByOwnercomBoughtByQuickenLoansOwner.html iehi-feed-63965 Tue, 22 May 2018 19:23:39 GMT Trader: Italy On Verge Of Inducing Fresh European Crisis http://implode-explode.com/viewnews/2018-05-22_TraderItalyOnVergeOfInducingFreshEuropeanCrisis.html It may be time to move on from rising Treasury yields and trade wars. An Italian-led euro crisis is on the verge of becoming the dominant theme for markets.

It turns out that the euro break-up trade isn't dead -- it's just been hibernating and is likely to return with a vengeance in the months ahead if the populists get their way.

Their proposed economic policies make no attempt at debt sustainability. Italy already has the largest absolute debt pile in the EU and the second-largest, after Greece, as a percentage of GDP, at 132%.

The coalition's plan sends the signal that it has no intention of ever paying back its debt. Things could spiral quickly because its fiscal promises will send BTP yields much higher, adding to refinancing costs and making the budgetary situation worse.

That creates a dilemma for the EU. Either fund Italy's largesse at the expense of every other member country, or kick Italy out of the euro.

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iehi-feed-63961 Mon, 21 May 2018 14:32:51 GMT 'The Day that We Can't Protect Human Sources': The President and the House Intelligence Committee Burn an Informant http://implode-explode.com/viewnews/2018-05-21_TheDaythatWeCantProtectHumanSourcesThePresidentandtheHouseIntell.html iehi-feed-63959 Sun, 20 May 2018 18:01:09 GMT Please, I'm Begging You, Forget The Economy | Lee Adler http://implode-explode.com/viewnews/2018-05-20_PleaseImBeggingYouForgetTheEconomyLeeAdler.html Anticipating policy change really isn't necessary. Market actors don't discount the future very well, if at all. The market responds to actual, not anticipated changes in liquidity. We can usually wait for the policy announcement to be sure. The markets can't sustain a reversal until the money is there. In other words, money talks!

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Massive Treasury supply will put downward pressure on the prices of all financial assets, not just Treasuries. Under QE, the Fed was funding all new Treasury supply. Under QT (Quantitative Tightening) it is actually adding to supply at the same time as it is pulling money out of the banking system. It's very bearish.

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iehi-feed-63939 Sat, 12 May 2018 18:11:29 GMT Michigan Attorney General Has $40 Million Stashed In Offshore Tax Haven http://implode-explode.com/viewnews/2018-05-12_MichiganAttorneyGeneralHas40MillionStashedInOffshoreTaxHaven.html iehi-feed-63938 Fri, 11 May 2018 22:33:37 GMT $407 Billion in Corporate Stock Buybacks: Tax Reform Promises Dashed; And Even Goldman Balks http://implode-explode.com/viewnews/2018-05-11_407BillioninCorporateStockBuybacksTaxReformPromisesDashedAndEven.html "President Trump and Congressional Republicans promised that their massive tax cuts for the wealthy and big corporations would result in workers' pay increasing by at least $4,000 a year. Instead big corporations have doled out over $407 billion to wealthy stockholders and executives since the tax law passed and promised just $7 billion to workers in one-time bonuses or minimum wage increases," said Frank Clemente, executive director of Americans for Tax Fairness. "Shockingly few workers are getting any pay hikes, as corporations have committed 59 times as much to buying back their stock as they have promised to their workers."

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New stock buyback announcements since the tax bill was passed in December are at $407 billion, up from $238 billion on April 9 when the website was launched -- an increase of 71%. The richest 1% own 40% of all stock; the richest 10% own 84%.

And yes, the stench of this is too much even for the venerable Vampire Squid:

Goldman Sachs is voicing skepticism about companies focused on returning vast amounts of cash through buybacks and dividends instead of investing in the future through new factories and equipment...

Surprisingly, Goldman Sachs found that since Trump's election companies that emphasize stock buybacks and dividends have trailed the S&P 500 by two percentage points. Heavy buyback stocks have essentially matched the broader market. On the other hand, companies that are investing in the future are winning.

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iehi-feed-63930 Tue, 08 May 2018 20:41:45 GMT Doug Noland: Old Roach Motel http://implode-explode.com/viewnews/2018-05-08_DougNolandOldRoachMotel.html

My issue is not with Amazon.com, but with today's thousands of wannabes. Just raise "capital" and spend as aggressively as possible. Profitability and cash-flows are a concern for some day out in the future. What matters is a clever idea, growth, market share and dominance the quicker the better. It's a financial, market and business backdrop that has fostered an Arm's Race Mentality - online retail and services, the cloud, AI and quantum computing, blockchain, 5G, cybersecurity, Internet of Things, electric automobiles, battery technologies and alternative energy, autonomous vehicles, biotech and pharmaceuticals, automation and robotics, nanotechnology, and on and on.

It's somewhat reminiscent of 1999, but on such a grander scale that the two periods are hardly comparable. The late-twenties is more pertinent: the proliferation of exciting technologies and innovation; lavishly over-liquefied securities markets; faith in policymakers and a general disregard for risk. In 1929, there was essentially no recognition of downside risk. A long boom had convinced about everyone that financial and economic underpinnings were sound. Similar to today, little attention was paid to the soundness of the finance underpinning the boom.

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