Implode-Explode Heavy Industries news feed

Moody's cuts bank outlook to 'negative' on Ottawa's bail-in rule

Tue, 29 Jul 2014 14:02:43 GMT

``The "bail-in" rule, included as part of the 2013 omnibus budget bill, asserts that the federal government would not necessarily bail out a bank on the brink of failure with taxpayer money...Canada has yet to set parameters for how a bail-in might work. Mark Carney, who was Bank of Canada governor at the time, said last April it was 'hard to fathom' a scenario where Canadians' deposits would be touched, as happened in the Cyprus bank failure.''

The Typical Household, Now Worth a Third Less

Tue, 29 Jul 2014 14:01:41 GMT

The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline, according to a study financed by the Russell Sage Foundation. Those are the figures for a household at the median point in the wealth distribution -- the level at which there are an equal number of households whose worth is higher and lower. But during the same period, the net worth of wealthy households increased substantially.
...
"The housing bubble basically hid a trend of declining financial wealth at the median that began in 2001," said Fabian T. Pfeffer, the University of Michigan professor who is lead author of the Russell Sage Foundation study.

Financial Times deleted gold manipulation story because it was too 'sensitive'

Tue, 29 Jul 2014 13:59:11 GMT

``My persistence for nearly five months was then partly rewarded when I was told by the Customer Services office in a telephone call that the article had been withdrawn from the FT's Internet site because its subject was "a sensitive matter" but that the editorial team could provide no further details.''

THE TRUTH ABOUT THE FED'S RELATIONSHIP WITH BUBBLES

Tue, 29 Jul 2014 00:42:40 GMT

Many commentators have previously argued that the Fed is too dumb or too inept to identify of categorize asset bubbles.
By focusing on the Fed's mental acuity, these commentators are overlooking a key factor: the Fed WANTS to asset bubbles.

The reason for this?

"Reprehensible" Lloyds Bank Agrees To $105 Million Wristslap For Manipulating LIBOR

Mon, 28 Jul 2014 14:43:57 GMT

``Having received full credit for for co-operation and suspending some individuals, Lloyds Bank has been fined by the CFTC the staggeringly wrist-slap-like sum of $105 million for the "manipulation, attempted manipulation, and false reporting of Libor." Total fines will amount to around $370 million across all UK and US regulators and all Llloyds divisions. ''

Argentine Default Drama Nears Critical Stage

Mon, 28 Jul 2014 14:43:07 GMT

``Mired in recession, Argentina already suffers from hard-currency shortages and annual inflation some economists estimate at 40%. A default could pressure the peso by undermining confidence, fuel inflation by making imports more expensive and worsen unemployment. It also could reduce Argentina's foreign-currency reserves, already among the lowest in the region at $29.7 billion.''

The BRICS Bank Is Born Out of Politics - Forbes

Mon, 28 Jul 2014 14:40:11 GMT

``Jim O'Neill, the economist who coined the term "BRIC" and a former colleague of mine at Goldman Sachs Asset Management, believes that the BRICS Bank is really "a permanent sign that global governance is a mess"... Not to mention, the BRICS countries, with their own development bank now in hand, may begin to function in many respects as its own trade bloc.''

Yellen "Watching What She Eats" Would Help Track Prices

Mon, 28 Jul 2014 14:31:24 GMT

``Menu prices don't change as often as those for many other goods and services. When they do increase, the move has to count, and it's a sign restaurant owners see inflation bubbling, according to Michael Bryan, a senior economist at the Federal Reserve Bank of Atlanta... "We think sticky prices give you a much better idea" of where inflation may be headed, the Atlanta Fed's Bryan said. "If I'm only going to change my price once a year, I'm going to be thinking about what's going to happen over the next 12 months''... Research by the Cleveland Fed has found that a simple measure of the median price change of all items tallied by the Bureau of Labor Statistics allows for a better reading on underlying inflation than either the CPI's group of all items or its core measure, which excludes food and energy prices.''

Pending Home Sales Unexpectedly Fall

Mon, 28 Jul 2014 14:28:45 GMT

``Pending home sales activity fell 1.1% in June, missing expectations for a 0.5% increase.''

Yukos Owners Win $50 Billion in 10-Year Fight With Russia

Mon, 28 Jul 2014 14:13:24 GMT

``The ruling marks a fresh headache for President Vladimir Putin, who faces intensifying U.S. and European sanctions aimed at forcing him to help end the separatist war in neighboring Ukraine, which has claimed more than 1,000 lives.''

Hussman: Yes, This Is An Equity Bubble

Mon, 28 Jul 2014 14:07:16 GMT

``At present, the major risk to economic stability is not that the stock market is strenuously overvalued, but that so much low-quality debt has been issued, and so many of the assets that support that debt are based on either equities, or corporate profits that rely on record profit margins to be sustained permanently. In short, equity losses are just losses, even if prices fall in half. But credit strains can produce a chain of bankruptcies when the holders are each highly leveraged. That risk has not been removed from the economy by recent Fed policies. If anything, it is being amplified by the day as the volume of low quality credit issuance has again spun out of control. ''

Meet the man who's driving Argentina to the brink

Mon, 28 Jul 2014 13:54:15 GMT

``Elliott has deployed an array of aggressive and creative legal tactics in an attempt to force Argentina to pay up, including using Ghana's courts to temporarily seize an Argentine navy vessel.''

The Italian Government Owes Over $100 Billion To Private Suppliers

Sun, 27 Jul 2014 23:29:42 GMT

``back in March, PM Renzi promised all debt would be paid back by, well, right now. One week later, he said September. We look forward to September to learn that not only will the debt not be paid back by the end of the year, but the total amount of money due to the private sector from the government has in fact, grown.'''

Luxembourg Pursues Offshore Trade in China's Yuan

Sun, 27 Jul 2014 23:22:31 GMT

"The internationalization of the renminbi is one of the major events, if not the major event, since the creation of the euro in terms of monetary events. It's potentially huge, so we want to be positioned for that market," Luxembourg Finance Minister Pierre Gramegna said in an interview... Even Crown Prince Guillaume, the 32- year-old heir to the Grand Duchy, has joined in, accompanying a December delegation to China.
Officials at the Luxembourg Stock Exchange keep enamel pins pairing the Luxembourg and Chinese flags to wear at events celebrating yuan-denominated bond listings, which hit 30.6 billion yuan in volume when Bank of China Ltd. 601988.SH +0.77% raised 1.5 billion yuan in May. At the Association of the Luxembourg Fund Industry, information packs and wall posters have been translated into Mandarin. Local legal and accounting firms and even the financial regulator, the CSSF, say they are hiring Chinese speakers.
...
At the end of [recent Luxembourg delegation meetings to China], China signed a clutch of agreements that should lead to the establishment in Luxembourg of a yuan clearing bank and bring more China-related funds, bonds and stocks to the country. Meanwhile, three of China's six biggest banks have set up European headquarters in the area locals call Luxembourg city's "mini Wall Street," and two more announced plans in the past few weeks.

At China Construction Bank Corp., which got its Luxembourg banking license last year, European chief Suosheng Li can look out from the bank's glass-and-steel headquarters building onto the three round towers of Fort Thungen, an 18th century citadel that is one of the city's main landmarks. CCB's nine-story office block is mostly empty right now, but the bank aims to fill it with staff who will help bring Chinese companies to Europe and serve China-focused European customers, Mr. Li said.

Generational Shift: The Daughter of Mortgage Bankers Association President David Stevens Doesn't Want a Mortgage

Sun, 27 Jul 2014 23:18:07 GMT

``... pops has already pledged to help her with the down payment if need be. And with combined income of nearly $108,000, the couple could most likely afford to purchase a fairly nice home or condo, even with home prices in the D.C. area pretty steep. The apparent issue is that they're currently in a central location, close to a subway stop and within walking distance to popular bars and restaurants. If they decide to buy, they'd likely need to forego those perks for a longer commute and a home/condo that isn't as nice as their current digs.''

Sign of Top? Banana Republic Trots out ‘Startup Guy' Look

Sun, 27 Jul 2014 23:16:10 GMT

`` Bubbles are consensual hallucinations that go on for a lot longer than anyone, afterwards, thought possible. And they implode when investors suddenly come out of it.''

France's Relentlessly Deteriorating Unemployment Fiasco

Sun, 27 Jul 2014 23:14:25 GMT

``The OECD pegs the French labor force at 28.6 million. So we divide those registered as unemployed who don't even have a part-time job (Categories A, D, and E), a total 4.075 million people, by the labor force of 28.6 million people. It produces an unemployment rate of 14.2%. And using the broadest measure of unemployment, which includes the involuntary part-timers, the unemployment rate skyrockets to 19.9%. This is why these rates are not published. They're too terrible. ''

Singapore's drive to become gold hub continues, As Refinery Gets LBMA Approval

Sun, 27 Jul 2014 22:52:39 GMT

``Metalor Singapore -- a newly created refinery in the Metalor Group -- was added to the London Bullion Market Association's (LBMA) good delivery list.''

Boehringer: German Gold Repatriation Still "On"; But Gold Probably Rehypothecated

Sun, 27 Jul 2014 14:02:43 GMT

``One reason that the gold was unavailable for quick delivery could be multiple ownerships of our bars at the Fed. Given today´s global fractional gold banking scheme, an (allegedly physically existing) bar in a central bank vault could have 10+ owners - and could thereby show up in 10+ central bank balance sheets as either "physical gold" or "gold claim". These two (completely different!) balance sheet items have not been properly differentiated for many decades now. We are potentially talking about non-existent physical bars at a magnitude of tens of thousands of tonnes!''

Russia Media Allege Flight MH17 Shot Down by Ukraine Missile Unit. Political Disarray Following Collapse of Kiev Government

Sun, 27 Jul 2014 13:56:13 GMT

``The Malaysian passenger plane MH17 may have been shot down July 17 by a Ukrainian anti-aircraft unit during an exercise, according to Russia's Ria Novosti, which cited an anonymous source in the Ukrainian security apparatus. The new and detailed allegations in the Russian media come amid mounting US and European Union charges that Russia is responsible for the shooting down of the jetliner. According to the report, the chief of the 156th Air Defence Rocket Regiment was ordered on July 17 to provide cover for ground troops near Donetsk. The unit was tasked with monitoring and destroying targets "with a rocket of type Buk-M1 in training mode.''