Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-60125 Fri, 01 Jul 2016 20:30:05 GMT Austrian court overturns presidential election, orders rerun (OPENING DOOR TO "AU-FWIEDERSEHEN") http://implode-explode.com/viewnews/2016-07-01_AustriancourtoverturnspresidentialelectionordersrerunOPENINGDOOR.html In a move that could turn into the next blow to the EU after Britain's exit vote, Austria's highest court on Friday ordered a rerun of the country's presidential election. The landmark decision gives a right-wing candidate the chance to turn his narrow defeat into victory.

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With Britain's impending departure from the EU, a chance by Freedom Party candidate Norbert Hofer to turn his loss into a win would boost not only his party but also far-right and nationalist movements elsewhere in Europe who are all lobbying for a weaker EU or an outright exit from the bloc.

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iehi-feed-60124 Fri, 01 Jul 2016 19:56:15 GMT Silver set for biggest weekly jump in almost 3 years http://implode-explode.com/viewnews/2016-07-01_Silversetforbiggestweeklyjumpinalmost3years.html iehi-feed-60123 Fri, 01 Jul 2016 16:40:48 GMT Japan Sinks Further Into Deflation; Calls for BOJ "Response" Increase http://implode-explode.com/viewnews/2016-07-01_JapanSinksFurtherIntoDeflationCallsforBOJResponseIncrease.html iehi-feed-60122 Fri, 01 Jul 2016 16:39:06 GMT China to "tolerate" weaker yuan http://implode-explode.com/viewnews/2016-07-01_Chinatotolerateweakeryuan.html iehi-feed-60121 Fri, 01 Jul 2016 11:45:09 GMT Gold heads for fifth week of gains, silver jumps to 22-month high http://implode-explode.com/viewnews/2016-07-01_Goldheadsforfifthweekofgainssilverjumpsto22monthhigh.html Gold rose 1 percent on Friday and was headed for its fifth weekly gain, supported by a weaker dollar and prospects for further monetary policy easing in the wake of Britain's vote to leave the European Union.

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Gold's strength benefited silver, which breached the $19 an ounce level on Friday for the first time since September 2014. It rose as much as 3.8 percent to $19.40 in earlier trade and was trading up 2.6 percent at $19.17. Silver has gained more than 8 percent this week and was on track for its best week since August 2013.

"For gold, the initial reaction was safe-haven demand due to the uncertain political situation in Europe, but then the latest move might be more of a reaction to comments from central banks that they are moving to an easing bias," Danske Bank senior analyst Jens Pedersen said.

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iehi-feed-60120 Fri, 01 Jul 2016 11:39:23 GMT Does China Face A Looming 'Japan Syndrome'? http://implode-explode.com/viewnews/2016-07-01_DoesChinaFaceALoomingJapanSyndrome.html Japan is increasingly being held out as a model for China's future, and in that sense, the failure of ‘Abenomics' should be seen as very bad news indeed.

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Since around 2010, China's overall debt has grown faster than its nominal growth rate, which is why some think it is already displaying signs of a ‘Japan Syndrome' in which growth will only be supported by taking on more total debt, whether this is due to deficit funded government expenditure or expanded private credit.

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What is clear is that Japan's overall level of debt is higher than China's, so it may be some time before China runs out of room... if economists look to the long term and can only find Japan as a suitable example for China to follow, then that is not a prospectus towards optimism but managed decline.

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iehi-feed-60119 Fri, 01 Jul 2016 11:28:01 GMT U.S. eyes military cooperation with Russia in Syria http://implode-explode.com/viewnews/2016-07-01_USeyesmilitarycooperationwithRussiainSyria.html The Obama administration is considering a plan to coordinate strikes against terrorist groups in Syria with Russia if Moscow agrees to use its leverage with Syrian President Bashar al-Assad to stop bombing U.S.-backed rebels, U.S. officials said Thursday.

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Under the proposed plan, the U.S. military and Russian Air Force would launch joint airstrikes against the al Qaeda-linked Jabhat al-Nusra, which is primarily fighting regime forces.

In exchange for deepening the military cooperation, Russia would halt its attacks on U.S.-backed rebels and other groups the U.S. does not consider terrorists, and agree to pressure Assad -- a close Russian ally -- to stop them as well.

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iehi-feed-60118 Fri, 01 Jul 2016 01:22:21 GMT Italy Granted "Extraordinary " €150BN Bank Bailout Program To Prevent "Panic, Run On Deposits" http://implode-explode.com/viewnews/2016-06-30_ItalyGrantedExtraordinary150BNBankBailoutProgramToPreventPanicRu.html iehi-feed-60117 Thu, 30 Jun 2016 23:51:12 GMT Puerto Rico Faces Record $2B Default July 1st: A Look at the Bonds Due http://implode-explode.com/viewnews/2016-06-30_PuertoRicoFacesRecord2BDefaultJuly1stALookattheBondsDue.html Puerto Rico Governor Alejandro Garcia Padilla says the island won't pay general-obligation debt coming due on Friday even with President Obama poised to sign a bill that enables the commonwealth to restructure its $70 billion debt load.

Puerto Rico and its agencies owe $2 billion of principal and interest. It may mark the island's biggest default yet and the first time it's skipped payments on general-obligation bonds, which are given the first claim on the island's funds. The federal bill, called Promesa, enables the commonwealth to restructure its debt through a control board that will also weigh in on its spending plans. The measure also shields Puerto Rico from creditor lawsuits seeking repayment. The island's electric utility agreed Thursday to extend an agreement with creditors so it can make its July payments.

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iehi-feed-60115 Thu, 30 Jun 2016 14:46:04 GMT Was Brexit fear a giant hoax or is this the calm before the next storm? - AEP http://implode-explode.com/viewnews/2016-06-30_WasBrexitfearagianthoaxoristhisthecalmbeforethenextstormAEP.html iehi-feed-60114 Thu, 30 Jun 2016 13:58:24 GMT Fed Stress Tests Clear 31 of 33 Big U.S. Banks to Boost Returns to Investors; Deutsche, Santander Flunk http://implode-explode.com/viewnews/2016-06-30_FedStressTestsClear31of33BigUSBankstoBoostReturnstoInvestorsDeut.html Big U.S. banks won permission from regulators Wednesday to boost dividends and buybacks, offering investors some welcome news after the sector got hammered when the U.K. voted last week to exit the European Union.

All but two of 33 institutions passed the final round of the Federal Reserve's annual "stress tests," conducted to gauge how such firms would fare in a new financial crisis. (See this interactive graphic on how each bank fared.)

Big firms such as Bank of America Corp. and Citigroup Inc., which struggled on the tests in recent years, passed this time. Morgan Stanley also passed but received a bit of a rebuke. The Fed said it found "weaknesses" in internal risk- management processes and required the bank to submit a revised capital plan by the end of the year, though it will still be able to return capital in the meantime.

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The U.S. banking units of two foreign firms, Deutsche Bank AG and Banco Santander SA, were flunked, due to Fed concerns about their ability to measure risks. It was the second year in a row the German bank failed and the third consecutive failure for the Spanish firm.

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For Deutsche Bank and Santander, the Fed's rejection of those firms' capital plans is a public embarrassment, but the practical impact is more limited. The rejection effectively locks up some U.S. profits, which can't be sent home to the parent firms at a higher rate until they pass the tests, but the firms don't have publicly announced plans to return capital home that would be affected by that restriction, a Fed official said.

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M&T Bank Corp. gained the Fed's approval, but the Buffalo, N.Y., firm passed only after scaling back its proposal to distribute funds to shareholders, to ensure its capital buffers stayed above the minimums required by the Fed.

It was the only bank to take the "mulligan" allowing banks to adjust their payout plans. Had the bank not done so, it would have failed the test by falling below two of the four required capital ratios in a hypothetical recession, the Fed said.

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iehi-feed-60113 Thu, 30 Jun 2016 13:39:58 GMT Former London mayor Boris Johnson says he will not run for British prime minister http://implode-explode.com/viewnews/2016-06-30_FormerLondonmayorBorisJohnsonsayshewillnotrunforBritishprimemini.html The question of who will lead Britain into its future outside the European Union -- a muddled mess for nearly a week -- was further scrambled Thursday, with the camp that had favored an exit splintering into warring tribes and forcing former London mayor Boris Johnson to drop from the contest to become prime minister.

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Michael Gove, the bookish justice secretary who was regarded as the intellectual architect of the "leave" campaign, shocked the country's political establishment Thursday by announcing that he, too, would enter the fray.

This would validate the "conspiracy" theory that Boris was being set up... so looks like he reacted by simply getting out of the firing line...

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iehi-feed-60112 Thu, 30 Jun 2016 13:29:38 GMT When Central Planning Fails http://implode-explode.com/viewnews/2016-06-30_WhenCentralPlanningFails.html iehi-feed-60111 Thu, 30 Jun 2016 13:27:09 GMT Italy 'Should Return National Currency' to Revive Its Economy - 5 Star Movement http://implode-explode.com/viewnews/2016-06-30_ItalyShouldReturnNationalCurrencytoReviveItsEconomy5StarMovement.html iehi-feed-60110 Thu, 30 Jun 2016 01:49:20 GMT Civil Uprising Escalates As 8th EU Nation Threatens Referendum http://implode-explode.com/viewnews/2016-06-29_CivilUprisingEscalatesAs8thEUNationThreatensReferendum.html iehi-feed-60109 Thu, 30 Jun 2016 01:48:00 GMT The Italian Job http://implode-explode.com/viewnews/2016-06-29_TheItalianJob.html iehi-feed-60108 Thu, 30 Jun 2016 01:44:32 GMT Biggest Diamond in More Than Century Fails to Sell in London http://implode-explode.com/viewnews/2016-06-29_BiggestDiamondinMoreThanCenturyFailstoSellinLondon.html The 1,109-carat diamond that's called Lesedi la Rona, or "our light" in the Tswana language spoken in Botswana, was expected to sell for about $86 million, based on a diamond sale in May. That would have made it the most expensive rough gem on record. Instead, the highest bid of $61 million didn't clear the so-called "reserve price" at a Sotheby's auction on Wednesday night, leaving it unsold.

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The Lesedi la Rona, just smaller than a tennis ball, is second in size only to the Cullinan, a 3,106-carat gem found near Pretoria in South Africa in 1905. It was cut to form the Great Star of Africa and the Lesser Star of Africa, which are set in the Crown Jewels of Britain.

The world's biggest and rarest diamonds had proven more resilient than smaller rough stones -- what mined gems are called before they're cut and polished. Prices for rough diamonds slumped 18 percent last year, the most since the financial crisis in 2008, amid lower demand and an industrywide credit crunch.

The diamond auction took place during a week of contemporary art sales in the U.K. On Tuesday, Sotheby's sold 52.2 million pounds ($70 million) of art as Asian and U.S. collectors went shopping, taking advantage of the drop in sterling after Britain voted to exit the European Union.

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iehi-feed-60107 Wed, 29 Jun 2016 18:31:42 GMT Turkish Stream project; Russia-Turkey tourism to resume after Erdogan apology http://implode-explode.com/viewnews/2016-06-29_TurkishStreamprojectRussiaTurkeytourismtoresumeafterErdoganapolo.html Russian-Turkish tourism spigot is about to be turned back on, as well...]]> iehi-feed-60106 Wed, 29 Jun 2016 15:18:10 GMT Against the Populist Tide, Draghi Wants More Central Bank Coordination http://implode-explode.com/viewnews/2016-06-29_AgainstthePopulistTideDraghiWantsMoreCentralBankCoordination.html Mario Draghi has just pushed the boundaries of central banking further into the realm of globalization, at a time when globalization is on the run.

Following the work of Reserve Bank of India Raghuram Rajan and others, the European Central Bank president on Tuesday became the most senior global central banker so far to call for more explicit policy cooperation between jurisdictions. Draghi's aim is to mitigate the damaging cross-border side-effects brought on by the combination of monetary activism and tighter global financial links.

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"What he's getting at is simply the idea that we don't have a great understanding of all the financial linkages and capital flows," Sharif said. "That certainly does call for better understanding among central banks, not necessarily coordinated policies."

Technocrats, including those at the the Bank for International Settlements in Basel, go further, saying that new global rules are the best way to create more financial stability for all concerned.

But if central bankers seek to increase coordination, either on interest-rate policies or financial rules, the groundswell of nationalism and populism sweeping developed economies risks making their job next to impossible. While monetary policy is increasingly global, most politics remains local.

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iehi-feed-60105 Wed, 29 Jun 2016 15:16:36 GMT Britain wins Brexit breathing space at gloomy EU summit http://implode-explode.com/viewnews/2016-06-29_BritainwinsBrexitbreathingspaceatgloomyEUsummit.html EU leaders gave Britain breathing space Tuesday by accepting it needed time to absorb a shock Brexit vote before triggering a divorce but insisted the crunch move could not wait months.

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After hours of talks in Brussels, EU President Donald Tusk said that he understood that time was needed "for the dust to settle" in Britain before the next steps can be taken.

But reflecting wider concerns of a domino effect of other states wanting to leave, European Commission president Jean-Claude Juncker said Britain did not have "months to meditate".

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