Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us 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-63958 Sun, 20 May 2018 17:59:10 GMT China Shoots Down Trump's $200 Billion Trade Target; But Gets "Pause" In Tariffs Anyways http://implode-explode.com/viewnews/2018-05-20_ChinaShootsDownTrumps200BillionTradeTargetButGetsPauseInTariffsA.html iehi-feed-63955 Fri, 18 May 2018 15:25:05 GMT A Liquidity Crisis of Biblical Proportions Is Upon Us http://implode-explode.com/viewnews/2018-05-18_ALiquidityCrisisofBiblicalProportionsIsUponUs.html iehi-feed-63954 Fri, 18 May 2018 15:00:00 GMT Crude oil may be above $70 but the US frackers are still struggling http://implode-explode.com/viewnews/2018-05-18_Crudeoilmaybeabove70buttheUSfrackersarestillstruggling.html iehi-feed-63953 Thu, 17 May 2018 19:45:12 GMT Qatari Investor: Michael Cohen Asked Me for a Million Dollars To Line Up Trump Admin. Deals http://implode-explode.com/viewnews/2018-05-17_QatariInvestorMichaelCohenAskedMeforaMillionDollarsToLineUpTrump.html Cohen suggested that Qatar could revitalize some Midwestern towns, saying, according to al-Rumaihi, "‘For example, we can find a steel factory that is about to shut down. You guys can invest. I'll give you some names to appoint as partners. You guys put in the money, we will put in the know-how, and share the profits 50-50. We can perhaps get a federal government ‘off-take agreement' for 10 to 15 years. It will revitalize the city, great PR, you guys will look like you're saving the city, everybody wins.'"

Al-Rumaihi surmised that the biggest winners would be the silent "partners," who would put in "know-how," rather than money and walk away with half the profits.

When al-Rumaihi asked Cohen more generally about important projects that the investment fund should back, Cohen said there were plenty of options. But Cohen said he would need $1 million first, as part of his fee, al-Rumaihi told The Intercept.

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Cohen and al-Rumaihi met again briefly that week at the Plaza Hotel, where Cohen showed al-Rumaihi pictures on his mobile phone of his daughter, who he said was in London at the time.

Al-Rumaihi recalled a bizarre turn in the conversation that "went something like, ‘Oh you guys know London pretty well, given all the properties you own, like Harrods -- I bet there's a lot of nice purses there she'd like.'" (A few months later, Cohen was in the news for sharing an artistic photo of her in lingerie on Twitter.)

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iehi-feed-63952 Thu, 17 May 2018 19:41:47 GMT New York eclipses London in ultra-luxury residential sales http://implode-explode.com/viewnews/2018-05-17_NewYorkeclipsesLondoninultraluxuryresidentialsales.html New York City has jumped to second place among the world's most luxurious cities based on residential sales volume. The city surpassed London in a move from third to second place, just behind Hong Kong in the top spot, according to a new report from Christie's International Real Estate...

New York also took second place in trophy sales behind Hong Kong, with seven sales above $50 million, and seven of 24 penthouse sales. The top 10 trophy sales worldwide totaled $1.24 billion, down slightly from $1.32 billion in 2016. New York City's contribution to the list was the the $91 million purchase of the penthouse at 432 Park Avenue which was fifth most expensive sale globally. The No. 1 sale was a property in Hong Kong, called the Peak, which sold for a stratospheric $360 million.

In 2017, the wealth of the world's billionaires grew to $9.1 trillion, according to Forbes, with more than 2,200 billionaires worldwide. If you include those with $500 million or more, that number increases to $11.7 trillion, said Conn. This means there is an incredible amount of capital to be deployed, he added.

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One feature of the market in 2017, and continuing into 2018, is the degree to which it is a buyer's market, said Dan Conn, CEO of Christie's, particularly uber-luxury buyers. "They don't have to go the dance," he said. It's up to sellers to woo them.

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iehi-feed-63951 Thu, 17 May 2018 19:38:51 GMT CFTC Commissioner Quintenz Drops Hints of More "Bespoke" US Crypto Regulatory Approach http://implode-explode.com/viewnews/2018-05-17_CFTCCommissionerQuintenzDropsHintsofMoreBespokeUSCryptoRegulator.html iehi-feed-63950 Thu, 17 May 2018 19:34:02 GMT The Entire Economy Is MoviePass Now. Enjoy It While You Can http://implode-explode.com/viewnews/2018-05-17_TheEntireEconomyIsMoviePassNowEnjoyItWhileYouCan.html It used to be that in order to survive, businesses had to sell goods or services above cost. But that model is so 20th century. The new way to make it in business is to spend big, grow fast and use Kilimanjaro-size piles of investor cash to subsidize your losses, with a plan to become profitable somewhere down the road.

Over all, 76 percent of the companies that went public last year were unprofitable on a per-share basis in the year leading up to their initial offerings, according to data compiled by Jay Ritter, a professor at the University of Florida's Warrington College of Business. That was the largest number since the peak of the dot-com boom in 2000, when 81 percent of newly public companies were unprofitable. Of the 15 technology companies that have gone public so far in 2018, only three had positive earnings per share in the preceding year, according to Mr. Ritter.

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The rise in unprofitable companies is partly the result of growth in the technology and biotech sectors, where companies tend to lose money for years as they spend on customer acquisition and research and development, Mr. Ritter said. But it also reflects the willingness of shareholders and deep-pocketed private investors to keep fast-growing upstarts afloat long enough to conquer a potential "winner-take-all" market. Today's public tech companies generally earn more revenue than their dot-com era counterparts, and could find it easier to flip the profit switch once they've reached a sufficient size.

"The fact that Google and Facebook were able to generate such enormous profits and growth does give hope to some companies," Mr. Ritter said. If start-ups can figure out to convert a large user base into paying customers, he added, "it can be enormously profitable."

Smells like a mega-credit bubble to us...

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iehi-feed-63949 Thu, 17 May 2018 15:06:28 GMT Consumers Skip More High-Rate Auto Payments Than During Crisis http://implode-explode.com/viewnews/2018-05-17_ConsumersSkipMoreHighRateAutoPaymentsThanDuringCrisis.html iehi-feed-63946 Tue, 15 May 2018 14:25:46 GMT Trump Indonesia project is latest stop on China's Belt and Road http://implode-explode.com/viewnews/2018-05-15_TrumpIndonesiaprojectislateststoponChinasBeltandRoad.html A subsidiary of Chinese state-owned construction firm Metallurgical Corporation of China (MCC) signed a deal with Indonesia's MNC Land to build a theme park outside Jakarta as part of the ambitious project, the company said on Thursday... The project includes Trump-branded hotels, residences and a golf course, as well as other hotel, shopping and residential developments.

... marketing materials for MNC Lido City refer to the theme park and Trump properties as flagship elements of the development, and corporate filings and internal documents show the Trump Organisation and the president's sons have been directly involved in various stages of its planning.

Negotiations on the Lido deal began before Trump's November 2016 election and subsequent pledge that his family business would not engage in new transactions with foreign governments during his presidency.

Still, "even if this deal is completely and entirely above board, it simply furthers the perception of impropriety" surrounding Trump's business dealings, said Christopher Balding, an economics professor at Shenzhen's HSBC Business School. "Especially with the potential trade war, this is not a good look ... Critics will be entirely right to demand answers."

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iehi-feed-63945 Mon, 14 May 2018 17:11:25 GMT Italian populists close to DEFY Brussels with new anti-EU Government http://implode-explode.com/viewnews/2018-05-14_ItalianpopulistsclosetoDEFYBrusselswithnewantiEUGovernment.html The Anti-EU Lega and anti-establishment Five Star Movement have already agreed on a coalition and will seek formal permission to form a government from Italian President Sergio Mattarella this afternoon.

The coalition, which has already stated its aim to ignore EU rulings which don't dovetail with its own aims, is Brussels worst nightmare -- and makes Britain's Brexit vote look like a minor Euro-policy hiccup.

The round of talks between the two parties which took place during the weekend has seen Lega's Matteo Salvini and Five Star's Luigi Di Maio drafting their "Contract for the Government of Change", which include a series of expensive economic promises and disruptive political changes.

Their plan, which would come at a combined estimated cost of £110billion (€124.5bn), includes a flat tax as low as 15 percent, a guaranteed income for the poor and a lower retirement age, currently set between 63-65. 

Implementing these measures would see Italy's deficit skyrocket well above the targets agreed with the EU.

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iehi-feed-63943 Mon, 14 May 2018 14:37:21 GMT The Failure of MacroPrudential Regulation http://implode-explode.com/viewnews/2018-05-14_TheFailureofMacroPrudentialRegulation.html Perhaps the single most oppressive factor in the US economy today is the Federal Open Market Committee. Since the 2008 financial crisis, the FOMC has subsidized the US banking systems to the tune of about half a trillion dollars per year, yet the committee members insist that their policies are intended to promote job creation and economic expansion.

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Most of the benefit of lower interest rates have flowed to the largest banks and leveraged investors while the US economy has largely healed itself. Do the math: $100 billion per quarter in subsidies to banks in terms of low deposit rates and bond yields, plus billions more per month paid by the Fed risk free in interest on excess reserves (IOER).

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iehi-feed-63942 Sun, 13 May 2018 16:34:45 GMT Elegant 23-room stone mansion in Flint hits the market for just $222,000 http://implode-explode.com/viewnews/2018-05-13_Elegant23roomstonemansioninFlinthitsthemarketforjust222000.html The Burroughs Mansion was built in 1926 on the bank of Gilkey Creek and is being sold at the price it would cost a buyer to purchase a one-bedroom apartment in Manhattan. The cheapest apartment in the city is currently being sold for $225,000.

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In 1989, the home was restored by more than 20 Flint interior designers, with each picking 1-2 rooms to decorate and furnish.

But now, the Burroughs mansion needs major renovation that will likely cost the next owner $150,000 to fully restore the mansion.

One of the basement rooms is flooded and there is a lot of mold on the walls and ceiling.

The home was foreclosed five years go and has been unoccupied since. It is currently owned by JP Morgan Chase Bank.

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One of the basement rooms is flooded and there is a lot of mold on the walls and ceiling. Several photos show the ceiling peeling (pictured) in a few of the rooms

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iehi-feed-63940 Sun, 13 May 2018 01:08:09 GMT If This Consumer Spending Chart Doesn't Change Direction, Look Out Retail Stocks http://implode-explode.com/viewnews/2018-05-12_IfThisConsumerSpendingChartDoesntChangeDirectionLookOutRetailSto.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-63936 Wed, 09 May 2018 21:51:30 GMT Cynthia Nixon: Marijuana industry could be 'a form of reparations' http://implode-explode.com/viewnews/2018-05-09_CynthiaNixonMarijuanaindustrycouldbeaformofreparations.html She expressed support for what is known as an "equity" program, which would prioritize giving marijuana business licenses to people who have received marijuana convictions in the past.

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In New York in 2017, 86 percent of fifth-degree marijuana arrests were of people of color, while only 9 percent of those arrested were white, despite data showing that black and white people are about equally likely to use marijuana.

Oakland, Calif., and Massachusetts have both launched marijuana equity programs in conjunction with legalization.

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iehi-feed-63935 Wed, 09 May 2018 21:48:51 GMT U.S. Treasury's Mnuchin: Revoking Boeing, Airbus licenses to sell jets to Iran http://implode-explode.com/viewnews/2018-05-09_USTreasurysMnuchinRevokingBoeingAirbuslicensestoselljetstoIran.html Licenses for Boeing Co and Airbus to sell passenger jets to Iran will be revoked, U.S. Treasury Secretary Steven Mnuchin said on Tuesday after President Donald Trump pulled the United States out of the 2015 Iran nuclear agreement...

Boeing agreed in December 2016 to sell 80 aircraft, worth $17 billion at list prices, to IranAir under an agreement between Tehran and major world powers to reopen trade in exchange for curbs on Iran's nuclear activities.

The U.S. Treasury Department, which controls licensing of exports, said the United States would no longer allow the export of commercial passenger aircraft, parts and services to Iran after a 90-day period.'

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iehi-feed-63934 Wed, 09 May 2018 21:46:48 GMT The Wealthy Are Hoarding $10 Billion of Bitcoin in Bunkers http://implode-explode.com/viewnews/2018-05-09_TheWealthyAreHoarding10BillionofBitcoininBunkers.html Argentine entrepreneur Wences Casares has spent the past several years persuading Silicon Valley millionaires and billionaires that Bitcoin is the global currency of the future, that they need to buy some, and that he's the man to safeguard it. His startup, Xapo, has built a network of underground vaults on five continents, including one in a decommissioned Swiss military bunker.

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Xapo's billionaire backers include LinkedIn Corp. co-founder Reid Hoffman and former Wall Street trader Mike Novogratz, who's in the process of setting up his own cryptocurrency merchant bank. Their bet is that Bitcoin is here to stay, and so is its biggest scourge, theft.

The first rule of owning Bitcoin is to securely keep your private key -- the code that lets you spend your coins. If thieves get it, they can loot your holdings in an instant, with no hope of recovery. Putting keys on a device connected to the Internet is both convenient and perilous: Hackers have proven adept at obtaining them from afar.

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Xapo's solution is to bury a cold-storage device in a mountainside and layer on electronic safeguards.... At Xapo, retrieving Bitcoin from the vault takes about two days. The company verifies a client's identity and authenticates the request before manually signing the transactions with private keys from multiple vault locations. Approval from three separate vaults is required for any transactions to be authorized. The company also offers customers a trading desk to buy and sell Bitcoin and created the first Bitcoin debit card to spend it.

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iehi-feed-63932 Wed, 09 May 2018 17:16:45 GMT Choked by US ban, ZTE halts smartphone sales in China http://implode-explode.com/viewnews/2018-05-09_ChokedbyUSbanZTEhaltssmartphonesalesinChina.html ZTE was likely forced to suspend Chinese sales of smartphones by Tuesday as supplies of key components remained cut off by Washington's ban on American technology exports to the company.

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ZTE was hit with the seven-year ban on American technology exports April 16 for illegally shipping equipment to Iran and North Korea. Since it does significant business with U.S. and Japanese parts suppliers, prolonged stoppages to production and sales will also worsen the impact on the global smartphone supply chain.

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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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