Implode-Explode Heavy Industries news feed

Senators ask U.S.Treasury to stop garnishing tax refunds to pay for old debts

Sat, 19 Apr 2014 02:33:48 GMT

``Following a one-line change in the farm bill in 2008, the Treasury rewrote regulations to allow the government to take tax refunds from citizens who owe the government debts that are more than 10 years old. That change, the government says, gives it the right to collect on debts like the one created when Social Security overpaid someone in the Grice family in 1977. Social Security says it seeks to collect from surviving children in birth order, but Grice, the middle of five children, is the only one in her family to have had her refund taken.''

Prelude to Economic Disaster: Billionaires Liquidating Real Estate in China; Stocks in US

Sat, 19 Apr 2014 02:22:41 GMT

``As these in-the-know elites unload their positions, average investors depending on their financial advisers to tell them the truth are slamming money into these stocks and paying, in some cases, 500 times earnings. Real estate investors are, likewise, overpaying for homes based on the idea that markets are "hotter" than they've been in years. ''

US financial showdown with Russia is more dangerous than it looks, for both sides

Fri, 18 Apr 2014 14:10:37 GMT

The strategy relies on hegemonic control over the global banking system, buttressed by a network of allies and the reluctant acquiescence of neutral states. Let us call this the Manhattan Project of the early 21st century...
[But] the US Treasury faces a more formidable prey with Russia, the world's biggest producer of energy with a $2 trillion economy, superb scientists and a first-strike nuclear arsenal. It is also tightly linked to the German and east European economies. The US risks endangering its own alliance system if it runs roughshod over friends. It is in much the same situation as Britain in the mid-19th century when it enforced naval supremacy, boarding alleged slave ships anywhere in the world, under any flag, ruffling everybody's feathers.

... Princeton professor Harold James sees echoes of events before the First World War when Britain and France imagined they could use financial warfare to check German power.He says the world's interlocking nexus means this cannot be contained. Sanctions risk setting off a chain-reaction to match the 2008 shock...

The greatest risk is surely an "asymmetric" riposte by the Kremlin. Russia's cyber-warfare experts are among the best, and they had their own trial run on Estonia in 2007. A cyber shutdown of an Illinois water system was tracked to Russian sources in 2011. We don't know whether US Homeland Security can counter a full-blown "denial-of-service" attack on electricity grids, water systems, air traffic control, or indeed the New York Stock Exchange, and nor does Washington.

Food Prices Rise Sharply

Fri, 18 Apr 2014 14:08:09 GMT

``What's happening is that wholesalers have raised the prices they charge grocers, and grocers in turn have passed along the increases to their customers, USA Today reports... The bad news may not be over. California's drought will probably push prices upward this year for fruits and vegetables, including avocados, lettuce and berries, Timothy Richards, a professor at Arizona State University's business school, told the paper.''

Rents Soar Out of Affordability Range for Middle Class

Fri, 18 Apr 2014 14:06:15 GMT

``A rule of thumb is that households shouldn't pay more than 30 percent of their income on rent and utilities. But now half of U.S. renters devote more than 30 percent of their income to housing, up from 38 percent in 2000, revealed a report from Harvard University.''

Nomi Prins on Nature of Bankers' Power

Fri, 18 Apr 2014 13:53:48 GMT

``The idea that only bankers can understand how to regulate banking, and have some sort of an inherent need to do that, has been this fallacy that has resulted in the crises which we've seen. The reality is if someone goes into Washington and realizes they can come out of Washington [later], make millions of dollars by gaining a position at a bank like Robert Rubin did ... we've seen in many cases that enabling [the banks] is the chosen route ...''

Russia and China announce decoupling trade from Dollar

Fri, 18 Apr 2014 13:50:47 GMT

``Russia has just dropped another bombshell, announcing not only the de-coupling of its trade from the dollar, but also that its hydrocarbon trade will in the future be carried out in rubles and local currencies of its trading partners - no longer in dollars''

Ukraine Talks Reach Initial Deal as Putin Keeps Force as Option

Thu, 17 Apr 2014 19:02:13 GMT

``... the deal came after six hours of negotiations in Geneva between Russian Foreign Minister Sergei Lavrov and and acting Ukrainian Foreign Minister Andrii Deshchytsia, as well as U.S. Secretary of State John Kerry and European Union foreign policy chief, Catherine Ashton. "All sides must refrain from any violence, intimidation or provocative actions," they said in a joint statement, which also called for international monitors to oversee implementation of the deal.''''

AIB trial: Pat Whelan and Willie McAteer found guilty

Thu, 17 Apr 2014 19:00:46 GMT

``Two former Anglo Irish bank chiefs have been found guilty of making loans designed to illegally prop up the bank's share price.''

Rule - Gold "Collateralization" in China is Bullish, Not Bearish

Thu, 17 Apr 2014 17:57:25 GMT

``The most important reason put out by the bullion banks and the mainstream media had to do with the study released by the World Gold Council that suggested that not all of the gold that's been imported into China has been used for central bank reserves or has gone into retail safekeeping... I would point out that what that means is that a whole class of creditors and debtors in China believes that gold is good security... So far from viewing this as a reason to sell gold, instead I think it's another affirmation of gold's timeless value, particularly through periods of stress.''

Eurozone Inflation Stuck in 'Danger Zone,' Keeps Pressure on ECB

Thu, 17 Apr 2014 17:47:49 GMT

``A shock drop in March eurozone inflation to its lowest level since November 2009 was confirmed on Wednesday, keeping pressure on the European Central Bank to intervene should prices not rebound.''

Only 3 Companies Now Have S&P's AAA Rating

Thu, 17 Apr 2014 16:37:18 GMT

``Automatic Data Processing was the latest U.S. blue chip to lose its pristine AAA rating from S&P, downgraded this week after it spun off its auto-dealers services unit, USA Today noted. That leaves only Johnson & Johnson, Exxon-Mobil and Microsoft as companies rated AAA, which is reserved for companies with the unassailable financial strength and discipline.''

Glaring Q.E. Failure Spotted - Money Velocity

Thu, 17 Apr 2014 16:32:40 GMT

``The Money Velocity picture is not pretty. The declining rate has broken lows set 50 years ago... Consumers and business are holding firm their money rather than investing it, as they see poor prospects. New capital formation is not occurring inside the USEconomy, or pitifully little. Debts are being dissolved, usually in default. It should be noted that the velocity of money has also been falling in the EU and Japan. The entire global economy is in recession, the pathogenesis shared.''

Why Crony Capitalist Brats Make Me ILL - David Stockman

Wed, 16 Apr 2014 18:22:16 GMT

During 2012 Levin's 14-person team of speculators apparently made a $2.0 billion profit on a short-term bet on about $7.5 billion of busted loans and bonds-- mainly the smoking remnants of sub-prime CDOs and private labor MBS. As head of the trading group, Leven's share was apparently the aforesaid $119 million, and this swell outcome was truly a gigs-to-riches story.
... in an honest two-way market, no one in their right mind would bet $7.5 billion on financial drek using high leverage and minimal hedges. And no 30-year old would be given leave to close his eyes and bet the ranch, as apparently Levin did, based on merely the "housing recovery" word clouds being emitted by the monetary politburo and its echo-boxes in the financial press.''

Yellen: Fed's Rate Policy Hinges on 3 'Big Questions'

Wed, 16 Apr 2014 18:19:17 GMT

``In a speech at the Economic Club of New York on Wednesday, Ms. Yellen said a too-low inflation rate is a bigger worry than the Fed's easy-money policies sparking a surge in consumer prices. She also reiterated her arguments from a late-March speech that she sees quite a bit of slack left in the labor market in measures other than the official jobless rate, which stood at 6.7% in March. The comments underscore Ms. Yellen's concern about the economy and labor market as well as the Fed's plan to keep interest rates low for many more months. ''

Haunted by soured mortgages, Bank of America loses $276 million

Wed, 16 Apr 2014 18:16:46 GMT

``Socked by mortgage-related legal expenses, Bank of America Corp. lost $276 million during the first quarter, sending its stock down sharply. The quarterly loss, its first in 2½ years, came despite lower loan losses and better than expected results in fixed-income trading, a slowing business that hurt rival JPMorgan Chase & Co. during the quarter. The results included $6 billion in litigation expense, much of it related to toxic bonds backed by housing-boom mortgages from Countrywide Financial Corp., ''

What the Heck is Going on With US Treasuries In Belgium?

Wed, 16 Apr 2014 18:12:42 GMT

``All we know for now is that someone in panic-mode yanked a pile of Treasuries away from the Fed and transferred it to some other entity... The entity could be Euroclear, which would then as custodian, and thus under its name, transfer some of them back to the Fed. Now that they're no longer in Russia's name [if this was indeed Russia], the US government would presumably have trouble freezing them as part of the sanction spiral unfolding over the Ukraine -- couldn't even credibly threaten to freeze them.''

The Best SEC [Retirement] Speech Ever

Wed, 16 Apr 2014 18:09:16 GMT

``I have had bosses, and bosses of my bosses, whose names we all know, who made little secret that they were here to punch their ticket. They mouthed serious regard for the mission of the commission, but their actions were tentative and fearful in many instances.''

William Pfaff: Next Step in Ukraine Crisis Is Unknown

Wed, 16 Apr 2014 17:57:21 GMT

``If the Russians were to try to seize all of Ukraine again, Ukrainians--including many Russian-speakers--would fight again, either against the Russian army, or as the same kind of underground force by which many of the Ukrainian people tried to regain their independence after the Second World War... [thus], the only practical solution to the present situation is negotiated administrative partition of the Ukrainian nation, and "Finlandization" (neutralization) of the country in its international relations, all of this underwritten by Russia, the E.U. and NATO.''

Tom Deutsch of the ASF on Eminent Domain & Loan Modifications -- A Mandelman Matters Podcast

Tue, 15 Apr 2014 17:44:54 GMT

``If Professor Robert Hockett is the man behind the plan to use eminent domain to take over underwater loans and write them down for homeowners, Tom Deutsch is his arch nemesis. On this 30 minute podcast, you'll get to hear one of the chief opponents to Professor Hockett's Municipal Plan, describe in detail why he believes the plan is entirely wrong in every way, and why he believes that is will ultimately fail.''