Implode-Explode Heavy Industries news feed Tracking the many faces of the global credit implosion. en-us iehi-feed-54421 Sat, 19 Jul 2014 19:37:15 GMT David Trott's Dirty Business Secret He Doesn't Want You To Know iehi-feed-54374 Tue, 15 Jul 2014 13:14:05 GMT Pee-Wee Trott's Gilded Play House iehi-feed-54346 Sat, 12 Jul 2014 00:38:26 GMT Russia to help to create major transport hub in Cuba, Forgives Debt, in Major Latin American Development Push This is actually a compilation of three important stories on Russia's activities in Latin America.

First story, Russia to help to create major transport hub in Cuba:

Russia, Cuba and possibly other countries will pool their efforts for creating a major transport hub in Cuba by upgrading the port of Mariel and building a modern international airport in San Antonio de los Banos, President Vladimir Putin said.


"Our short-term prospects include the development of new oilfields in the Cuban offshore area. To these ends, Zarubezhneft and Rosneft engage in active cooperation with Cupet, Cuba's state oil company," Putin said, adding that INTER RAO was also planning to join the construction of power units for the Maximo Gomez and East Havana TPP. The supply of Russian electric power equipment to Cuba is well underway.

Putin noted that a substantial number of Russian companies - specialising, in particular, in the production of reinforced plastic goods, auto spare parts, tractor assembly and installation of heavy equipment for the railway industry - had shown interest in closer cooperation due to the development of the Mariel special economic zone in Cuba.


The second story goes more into the debt forgiveness aspect:

Russia has written down $32 billion of Cuba's Soviet era debt. Russian President Vladimir Putin signed the law ahead of his official visit to Latin America, with Havana as his first stop.

The agreement was first signed in October 2013 and draws a line under a twenty-year dispute.

Cuba is now required to pay back $3.2 billion over the next 10 years.

Also note:

The tour will culminate with the BRICS summit, where the final bricks of a joint development bank will be laid. The new financial body that'll focus on infrastructure projects will have a $100 billion budget, and could represent a solid attempt by developing economies to become less dependent on loans from such international organizations as the International Monetary Fund and the World Bank.

And here's the final one, Russia ready to cooperate with all Latin American associations, which is more of a fluffy overview of Russia's overture to Latin America:

"In this region, the traditions of love of freedom and respect for other nations and cultures are strong, and there are practically no serious intergovernmental conflicts or the wish to pursue the divide and rule policy. On the contrary, nations in the region are ready for joint action to protect their shared Latin American home," Putin said in an exclusive interview to the Latin American news agency Prensa Latina ahead of his South American tour, during which he will visit Cuba, Argentina and Brazil.

But note

Putin said that the establishment of contacts between CELAC and the countries taking part in the Customs Union and Common Economic Space would open up many new opportunities. "Russia, Belarus and Kazakhstan are deepening the integration process. In May, we signed the Agreement on Establishing the Eurasian Economic Union, which will come into force on January 1, 2015," he said.


He reaffirmed that Russia is open to substantive interaction with all integration formations in the Latin American region. That includes the Union of South American Nations (UNASUR), the Common Market of the South (MERCOSUR), the Bolivarian Alliance for the Peoples of Our America (ALBA), the Pacific Alliance, the Central American Integration System (SICA) and the Caribbean Community (CARICOM).

So there seems to be some substantial talk about bridging between Russia's burgeoning Eurasian economic union, and Latin and Carribean states (though it isn't clear that the latter is terribly "integrated" ... yet).

BONUS ANALYSIS: Jim Willie (, who follows these things even closer than we do, has kindly allowed his advance-circulated comments on these developments to be published for 'Implode readers:


Russia, Cuba and possibly other countries will pool resources for creating a major transport hub in Cuba by upgrading the port of Mariel and building a modern international airport in San Antonio de los Banos, along with a major cargo facility. Russian President Vladimir Putin gave an exclusive interview to the Latin American news agency Prensa Latina ahead of his South American tour. The itinerary is for visits to Cuba, Argentina, and Brazil. The lead item is $31.5 billion in debt forgiveness. Cuba pledged to spend $3.5bn on a raft of significant investment projects, which Russia will select and negotiate together with the Cuban side. The debt extends from the old Soviet era. The step is unprecedented, and testifies to the strategic nature of their bilateral relations, in his words. Imagine a foreign nation setting foot on United States soil to forgive 90% of its $17 trillion debt. An Intergovernmental Agreement was signed in October 2013, in its final stage of ratification. A multi-national commission was created, which must go beyond the intensely corrupt Fidel cabal clan in order to be effective. The commission has met 12 times already, around business councils as well and the Havana Trade Fair.

As for details, the projects are aimed at social and economic development of the bereft poverty stricken nation, a failure of crony communism. The average wage in Cuba several years ago was $25 to $30 per month (not per day). Offshore energy projects are in store, progress already made. Zarubezhneft started drilling the first development well in the Boca de Jaruco oilfield in August 2013. Putin is actively promoting the projects, stating "Our short-term prospects include the development of new oilfields in the Cuban offshore area. To these ends, Zarubezhneft and Rosneft engage in active cooperation with Cupet, Cuba's state oil company." The construction of power units for the Maximo Gomez site and in East Havana is underway, with supply of Russian electric power equipment... As for verification on the ground, a Hat Trick Letter subscriber reported, "I was at a cocktail party last night with a guy who just returned from the area. Major construction was already underway, in a big way." ... It seems like Cuba will become a BRICS Associate nation, an adopted basket case to become a showcase.


The Putin Global Order centers on trade, development, and cooperation. He cited the goal of a strong, economically stable, politically independent, united Latin America to fit into the emerging polycentric world order... Notice the theme to counter the spread of fascism by the USGovt, the divide & control used by US teams, the constant destabilization of economies used to impose banker controls, the regular interference by WashingtonDC. King Vladimir has taken aim at the US hegemony in Latin America directly, working to organize the continent. Possibly it will join as extension to the Eurasian Trade Zone... Talk of contact with the Russian Customs Union was made. He reaffirmed that Russia is open to substantive interaction with all trade groups in the Latin American region... Argentina, the once thriving nation, now a socialist ruin. Look for Argentina to receive even more important extended hand in aid, development, and revitalization... The Jackass believes the Eurasian Trade Zone refers to its inception, but the zone will become a global trade zone which excludes the United States.

iehi-feed-54296 Tue, 08 Jul 2014 01:49:18 GMT Shocking: US Minimum Wage | Complete Senior ``There's an argument in all of those statements that goes something like this: If you're working a minimum wage job, you must be worth the minimum wage. In other words, you're really worth nothing and that's what we're going to pay you. If you didn't work hard enough to become a CEO like I did when Daddy appointed me, then you don't deserve to eat.

I'm not sure when we became a nation of greedy, hateful pigs, but I do remember a time when a business took pride in not only their workmanship, but in the fact that they were creating jobs in their community. They gave people a purpose and a living wage. It allowed a person the dignity of being self-sufficient and the security of taking care of themselves and their family. In return the company got dedication, loyalty and a product or service that others wanted to buy. Henry Ford, one of the country's biggest manufacturing icons made a point of making sure that his employees earned enough to buy a car. Today, we have Wal-Mart workers, who despite working full time are so poorly paid that they have to rely on taxpayer subsidized food stamps, welfare and Medicare totaling more than $1 million per store.''

iehi-feed-54252 Tue, 01 Jul 2014 18:55:40 GMT Feud Between Oligarchs Seen as Cause of Bank Run in Bulgaria hang up South Stream?]]> iehi-feed-54239 Tue, 01 Jul 2014 02:48:48 GMT Even on Some of the Most Progressive Porches in America, Foreclosures Not Well Understood - Mandelman Matters iehi-feed-54237 Mon, 30 Jun 2014 23:47:07 GMT Will The UN Send Troops To Detroit To Enforce A Canadian Group's Agenda? iehi-feed-54219 Sun, 29 Jun 2014 14:02:11 GMT New York Launches New Foreclosure Avoidance Program... Hundreds Could be Saved? - Mandelman Matters iehi-feed-54198 Thu, 26 Jun 2014 20:30:14 GMT I Remember When Coming From Detroit Meant You Were A Bad Ass iehi-feed-54154 Sat, 21 Jun 2014 20:22:40 GMT WWII, The Broken Window Fallacy and Tyler Cowen Sadly, it is not just intellectual deficients like Paul Krugman making this case. In a new op-ed in the New York Times, Tyler Cowen of George Mason University argues that technological advances from nuclear research to rocketry to internet and robotics have all been spurred by defense spending, and thus war or threats of war are necessary to continue the advance of civilization.

And, we might add, there's a double-fallacy to the broken window fallacy which is clear now (after 40 years of supply-side economics): that the money spent on replacing broken windows (conflict) is not being saved either (Bastiat observed the money was not being spent elsewhere). That means you don't have capital formation, which one would think is critical to maintaining the prosperity that permits a country the luxury of elective war in the first place.

iehi-feed-54134 Wed, 18 Jun 2014 18:39:50 GMT Is Disney's Marvel Comics Group Going To Offer Financing Plans On Comic Books? iehi-feed-54103 Sat, 14 Jun 2014 17:21:07 GMT Did Financial Terrorist David Trott Violate Campaign Finance Laws? iehi-feed-54006 Tue, 03 Jun 2014 02:52:26 GMT El Gringo Bandito David Trott Is Having Trouble Buying A Seat In Congress iehi-feed-54001 Mon, 02 Jun 2014 15:26:28 GMT HUD to Resolve Key Reverse Mortgage Issues Going Forward - Mandelman Matters iehi-feed-53996 Sun, 01 Jun 2014 14:16:12 GMT Forced Into Foreclosure -- Want to See How it Happens? - Mandelman Matters iehi-feed-53963 Wed, 28 May 2014 14:26:49 GMT Is College Worth It? Clearly, New Data Say When experts and journalists spend so much time talking about the limitations of education, they almost certainly are discouraging some teenagers from going to college and some adults from going back to earn degrees. (Those same experts and journalists are sending their own children to college and often obsessing over which one.) The decision not to attend college for fear that it's a bad deal is among the most economically irrational decisions anybody could make in 2014.

The much-discussed cost of college doesn't change this fact. According to a paper by Mr. Autor published Thursday in the journal Science, the true cost of a college degree is about negative $500,000. That's right: Over the long run, college is cheaper than free. Not going to college will cost you about half a million dollars.

We disagree with the thrust of this article. We think what the stats are showing is little more than: getting a 4 year degree is now so "trivial" and standard, that it says more about your own lack of discipline (and probably presence of mental/behavioral problems) to not get the degree. In other words, its not that people with the college degrees are "so good"; it is just that they have "proven" they are not "THAT" bad. They are not, in other words, the absolute dregs of society.

Even more stark facts regarding differences in outcome apply to the question of whether one completes high school. But no one is advocating that high school is worth $100-200k.

The significant phenomenon here is the poor cultural knowledge and practices of those who tend not to go to college; not that others are affirmatively gaining much of an advantage from college. After all, does anyone seriously find bachelor's-level grads generally more employable specifically because of college? Everyone knows that a "Master's is the new Bachelor's", and if you actually want to get ahead (not just not fall behind), you need an advanced degree/training.

Further, if the same college-bound kids skipped college and went to work, they'd probably still be more responsible (better workers, savers, etc.) than the types that typically don't go to college -- they would tend to save earlier, and quite likely, close the gap between their college-bound peers. Thus, the $500k lifetime income improvement doesn't impress us. (There are other flaws in the analysis, e.g., that a recession or depression lowers the lifetime earnings of those who enter the job market in it, and if this cohort were individually analyzed, the benefit of college would likely be even more slim. )

Also the whole commentary misses the overriding fact that the median and average real incomes are stagnant to falling (depending on the inflation index used) over the last generation. Obviously college grads are included in that, which means we truly are comparing the rate of sinking stones to pebbles.

We feel the most on-point part of the article is:

From the country's perspective, education can be only part of the solution to our economic problems. We also need to find other means for lifting living standards -- not to mention ways to provide good jobs for people without college degrees.

But from almost any individual's perspective, college is a no-brainer. It's the most reliable ticket to the middle class and beyond.

We'd be severely reticent to call the median college-grad wage "middle class" these days, but would agree that such people will tend to be better off than the types of people who don't go to college at all (or don't finish it). That doesn't necessarily say much about the actual performance of the higher education system. And this is totally ignoring that its real cost increase has far outstripped any metric of improvement in "benefit".

Thus, by Leonhardt's logic, the higher education system will be "beneficial" until the moment that its inflated cost is one dollar more than the lifetime marginal improvement to the student's income. Whoopie. As above, the analysis that has been done on that question so far is flawed and unscientific in that it doesn't measure the other half of the equation (earnings of the college-bound cohort that opts not to go to college), but even ignoring that point, we are fast heading in the direction where the fiscal benefit of a typical undergraduate degree is minimal. This direction of change seems not to bother Leonhardt, but it bothers us.

iehi-feed-53911 Tue, 20 May 2014 18:59:45 GMT El Gringo Bandito David Trott Strikes Again iehi-feed-53904 Mon, 19 May 2014 13:43:23 GMT What Loan Modifications Have to Do with Leaving Money on the Table and Knowing the Value of a Dollar - Mandelman Matters iehi-feed-53880 Wed, 14 May 2014 23:19:48 GMT Motley Fooled by Reverse Mortgages -- New York Times No Better - Mandelman Matters iehi-feed-53864 Mon, 12 May 2014 22:18:02 GMT A Visit to the Front Lines: Richmond, California, Eminent Domain - Mandelman Matters