Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-65285 Mon, 06 Apr 2020 15:43:22 GMT America is Committing Economic Suicide http://implode-explode.com/viewnews/2020-04-06_AmericaisCommittingEconomicSuicide.html iehi-feed-65283 Sun, 05 Apr 2020 16:09:19 GMT Thousands of applicants, zero loans: Trump's small businesses lending program is a failure to launch http://implode-explode.com/viewnews/2020-04-05_ThousandsofapplicantszeroloansTrumpssmallbusinesseslendingprogra.html One day after the launch of a $350 billion loan program designed to rescue millions of small businesses pummeled by the coronavirus pandemic, technical glitches continued to cripple the ability of the nation's top lenders to begin processing the loans, throwing into doubt when any of the applicants will start receiving any money.

The lending program, which forms part of the $2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act, is a much-needed lifeline for the 30 million small businesses across the country. It offers loans of up to $10 million to companies who employ fewer than 500 people. Those loans are forgiven as long as the businesses meet certain conditions, such as using the majority of the funds to pay worker salaries for the eight weeks following the loan closing.

However, two of the nation's biggest banks say they have only just been able to start processing loans.

"We are all waiting on the Small Business Administration," a Chase senior executive told NBC News.

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With banks reporting tens of thousands of applications just in the first day, the system is already overwhelmed. The SBA usually processes about 60,000 loans in an entire year.

Despite this, President Donald Trump said in a news briefing Saturday that, "in 24 hours, the SBA processed over 28,000 loans."

It's worth reiterating that Trump is lying here; not a single loan has been funded. Remember, these were supposed to be emergency funds -- getting out as quickly as possible. As we suspected, it would have been better to just staff up the SBA and do these in-house, rather than going through banks. Would have created much-needed jobs, too. But grow government a tiny bit to save the economy? Seems like a non-starter for this administration...

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iehi-feed-65282 Sun, 05 Apr 2020 15:54:21 GMT This Brooklyn Landlord Just Canceled Rent for Hundreds of Tenants http://implode-explode.com/viewnews/2020-04-05_ThisBrooklynLandlordJustCanceledRentforHundredsofTenants.html iehi-feed-65280 Fri, 03 Apr 2020 21:52:26 GMT The Unemployment Rate Is Probably Around 13 Percent http://implode-explode.com/viewnews/2020-04-03_TheUnemploymentRateIsProbablyAround13Percent.html iehi-feed-65279 Fri, 03 Apr 2020 21:35:49 GMT Trump's Company Seeks to Ease Financial Crunch as Coronavirus Takes Toll - The New York Times http://implode-explode.com/viewnews/2020-04-03_TrumpsCompanySeekstoEaseFinancialCrunchasCoronavirusTakesTollThe.html Representatives of Mr. Trump's company have recently spoken with Deutsche Bank, the president's largest creditor, about the possibility of postponing payments on at least some of its loans from the bank.

And in Florida, the Trump Organization sought guidance last week from Palm Beach County about whether it expected the company to continue making monthly payments on county land that it leases for a 27-hole golf club.

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"These days everybody is working together," said Eric Trump, the president's son, who helps manage the family business. "Tenants are working with landlords, landlords are working with banks. The whole world is working together as we fight through this pandemic."

The Trump Organization's requests put lenders and landlords in the awkward position of having to accede or risk alienating Mr. Trump.

Wow, kumbaya, Eric Trump! That's totally what individuals and businesses without "Trump" in their names are experiencing -- their lenders and landlords coming together in a veritable drum circle to help out, instead of, for example, landlords who won't budge, a government and big bank incompetent roll-out of small business aid, clogged unemployment offices, and tax rebate checks that will likely take months to get out.

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iehi-feed-65278 Fri, 03 Apr 2020 15:29:11 GMT The missing six weeks: how Trump failed the biggest test of his life http://implode-explode.com/viewnews/2020-04-03_ThemissingsixweekshowTrumpfailedthebiggesttestofhislife.html Disbanding the [pandemic response unit of the national security council] exacerbated a trend that was already prevalent after two years of Trump -- an exodus of skilled and experienced officials who knew what they were doing. "There's been an erosion of expertise, of competent leadership, at important levels of government," a former senior government official told the Guardian.

"Over time there was a lot of paranoia and people left and they had a hard time attracting good replacements," the official said. "Nobody wanted to work there."

It was hardly a morale-boosting gesture when Trump proposed a 16% cut in CDC funding on 10 February -- 11 days after the World Health Organization had declared a public health emergency over Covid-19.

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Konyndyk recalls attending a meeting in mid-February with top Trump administration officials present in which the only topic of conversation was the travel bans. That's when he began to despair about the federal handling of the crisis.

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So it has transpired. In the wake of the testing disaster has come the personal protective equipment (PPE) disaster, the hospital bed disaster, and now the ventilator disaster.

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Early on in the crisis, Griffeth said, it dawned on her and many of her peers that the federal government to which they would normally look to keep them safe was nowhere to be seen. They resigned themselves to a terrible new reality.

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But just in the last few days, Griffeth has started to see the emergence of something else. She has witnessed an explosion of Americans doing it for themselves, filling in the holes left by Trump's failed leadership.

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iehi-feed-65277 Fri, 03 Apr 2020 15:20:51 GMT The Virus Economic Response Is Already Being Botched http://implode-explode.com/viewnews/2020-04-03_TheVirusEconomicResponseIsAlreadyBeingBotched.html The good news is that the $2 trillion CARES Act (Coronavirus Aid, Relief, and Economic Security Act) Congress passed last week does, on paper, provide a lot of economic life support. The bad news is that it looks as if it could be weeks, maybe even months, before serious amounts of money flow to those who need aid right now.

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Both of these programs are very good ideas. The trouble is that both are having a hard time getting started -- and time is one thing millions of distressed Americans, many of whom were already living on the edge, don't have.

On unemployment benefits: State unemployment offices, already overwhelmed by the surge in applications, aren't ready to disburse these extra benefits, and may not be ready for quite a while -- a disastrous delay for families already in dire financial straits.

Small business loans are also facing a crippling lag in processing, with potential borrowers either unable to complete the forms or being told that they will have to wait three weeks. Furthermore, for some reason the federal government, instead of lending money directly, is channeling small-business lending through private banks -- and the banks are complaining that they have yet to receive crucial guidelines and that the administration is setting unworkable requirements.

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iehi-feed-65276 Thu, 02 Apr 2020 15:03:31 GMT US weekly jobless claims double to gargantuan 6.6 million http://implode-explode.com/viewnews/2020-04-02_USweeklyjoblessclaimsdoubletogargantuan66million.html The torrent of Americans filing for unemployment insurance skyrocketed last week as more than 6.6 million new claims were filed, the Labor Department reported Thursday. That brings to 10 million the total Americans who filed over the past two weeks.

Economists surveyed by Dow Jones had expected 3.1 million for last week, one week after 3.3 million filings in the first wave of what has been a record-shattering swelling of the jobless ranks. The previous week's total was revised higher by 24,000.

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"Sadly, this probably still underestimates the actual numbers because of the overload in the systems and not every call getting through," said Liz Ann Sonders, chief investment strategist at Charles Schwab. "Even if we're accurately calculating the numbers, we still likely have worse to come."

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the sudden shutdown from social distancing policies caused a cascade of joblessness unlike anything the nation has ever seen.

"Not only was the number worse than expected, but with lockdowns becoming stricter and being extended, we should anticipate further surges in jobless claims over the coming weeks," said Seema Shah, chief strategist at Principal Global Investors.

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iehi-feed-65275 Wed, 01 Apr 2020 20:07:18 GMT 40% of N.Y. Tenants May Not Pay Rent This Month. What Happens Then? http://implode-explode.com/viewnews/2020-04-01_40ofNYTenantsMayNotPayRentThisMonthWhatHappensThen.html ``No one knows for sure how many renters in New York City will have a hard time paying, but landlords and the real estate industry say they are bracing for perhaps as many as 40 percent of tenants, if not more, skipping their April payments.

... "I'm trying not to panic," said Christopher Athineos, whose family owns nine apartment buildings in Brooklyn with about 150 tenants. "In my lifetime and even my parents' and grandparents' lifetime, we have never seen anything like this."

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Gov. Andrew M. Cuomo of New York has ordered a 90-day moratorium on evictions, a lifeline to people who cannot pay rent and are worried about losing their homes during the crisis. Other states have followed New York State's lead, including California, which introduced a 60-day ban on evictions.

But that doesn't wipe away that rent from having to be paid later on.

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The current economic crisis has all the ingredients to cause a collapse in the New York City real estate market, said Joseph Strasburg, the president of the Rent Stabilization Association, which represents 25,000 landlords in New York City.

A significant drop in April rent payments would create an immediate domino effect and leave many landlords without enough money to pay their water and sewer bills for their properties, he said.

Rent payments could drop even more drastically in May, Mr. Strasburg s..

aid, when tenants who lost jobs in March may have even less money to pay that month's rent.

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Some landlords have worked out payment plans with tenants, while others have said they cannot offer concessions because they face their own challenges.

Mr. Strasburg said landlords who have first-floor commercial tenants, such as restaurants, fear that those tenants too will not be paying rent in April. Landlord representatives said property owners also deserve a lifeline, including the option to defer utility payments and their property taxes.

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The $2 trillion federal stimulus bill offers assistance specifically for renters and homeowners, though they are limited in most cases to people with federally backed or supported mortgages.

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iehi-feed-65272 Tue, 31 Mar 2020 22:45:21 GMT The CARES Act: What You Need to Know About Emergency Coronavirus Small Business Relief http://implode-explode.com/viewnews/2020-03-31_TheCARESActWhatYouNeedtoKnowAboutEmergencyCoronavirusSmallBusine.html On March 31, 2020, the U.S. Department of the Treasury and Small Business Administration (SBA) released the application form for businesses to apply for and obtain loans under the Paycheck Protection Program. This program, established under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), provides $349 billion for small business loans to cover qualified payroll costs; rent; utilities; and interest on mortgage and other debt obligations. To obtain a loan, a qualifying small business should submit an application through an SBA and Treasury approved bank, credit union, or nonbank lender.

Treasury has indicated that applicants can begin obtaining loans from participating lenders as soon as Friday, April 3, 2020 (for small businesses and sole proprietorships).

Happily, it looks like payments to 1099 contractors are included in the definition of "payroll", which should result in substantial relief to businesses to have any "gig" workers. Also great that those gig workers themselves can apply for loans -- even if just sole proprietors.

Here's the text of the final passed version of the CARES Act, HR 748 (it's imperative to look at the right version, as there were significant changes between the Senate and House versions).

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iehi-feed-65271 Tue, 31 Mar 2020 22:20:46 GMT Trump to Governors: I'd Like You to Do Us a Favor, Though http://implode-explode.com/viewnews/2020-03-31_TrumptoGovernorsIdLikeYoutoDoUsaFavorThough.html ... there's little doubt governors feel life-or-death pressure to flatter the president. "Several governors made clear they fear inadvertently harming their own citizens if they are too strident in demands for desperately needed medical supplies, or if they clash too publicly with Trump over pandemic policy as the contagion spreads," reported The Los Angeles Times. A New York official told The Post that Gov. Andrew Cuomo and others in the state are "working under the assumption they will not get much help from the federal government, but that criticizing Trump could jeopardize any help they could receive."

Trump isn't just trying to feed his ego by coercing blue state governors into pretending that he's doing a good job. He's getting help with the November election. His campaign just rolled out a new ad, titled "Hope," featuring appreciative quotes from Cuomo and Gov. Gavin Newsom of California. With the lives of their constituents at stake, they've given him the made-for-TV sound bites he was never able to extract from Ukraine's president, Volodymyr Zelensky... in order to secure lifesaving assistance, our leaders have to grovel to the man who has helped create our tragedy.

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iehi-feed-65270 Tue, 31 Mar 2020 21:23:35 GMT Coronageddon: Job losses could total 47 million, unemployment rate of 32%, Fed says http://implode-explode.com/viewnews/2020-03-31_CoronageddonJoblossescouldtotal47millionunemploymentrateof32Feds.html The projections are even worse than St. Louis Fed President James Bullard's much-publicized estimate of 30%. They reflect the high nature of at-risk jobs that ultimately could be lost to a government-induced economic freeze aimed at halting the coronavirus spread.

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A record 3.3 million Americans filed initial jobless claims for the week ended March 21. Economists surveyed by Dow Jones expect another 2.65 million to join them this week.

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The central part of Faria-e-Castro's compilations comes from previous Fed research showing 66.8 million workers in "occupations with high risk of layoff." They are sales, production, food preparation and services. Other research also identified 27.3 million people working in "high contact-intensive" jobs such as barbers and stylists, airline attendants, and food and beverage service.

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That would bring the U.S. unemployment rolls to 52.8 million, or more than three times worse than the peak of the Great Recession. The 30% unemployment rate would top the Great Depression peak of 24.9%.

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iehi-feed-65269 Tue, 31 Mar 2020 14:45:27 GMT Goldman Sees U.S. Shrinking 34% April-June; Unemployment of 15% http://implode-explode.com/viewnews/2020-03-31_GoldmanSeesUSShrinking34AprilJuneUnemploymentof15.html iehi-feed-65267 Tue, 31 Mar 2020 00:45:37 GMT The crackpot whose 'scientific study' informed the administration's do-nothing pandemic response http://implode-explode.com/viewnews/2020-03-30_Thecrackpotwhosescientificstudyinformedtheadministrationsdonothi.html ... we've determined that Epstein doesn't understand the nature of the virus, doesn't understand what happened in Washington State (which he relied on in his model of the virus' transmission), and doesn't understand that the virus will not necessarily "weaken over time." In short, his conclusions and the methodology underlying them are sheer garbage. But it is the exchange at the end of the interview between Chotiner and Epstein that is the most revealing:

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[Epstein] You just don't know anything about anything. You're a journalist. Would you like to compare your résumé to mine?

[No, actually, I would not.]

Then good. Then maybe what you want to do is to say, "Gee, I'm not quite sure that this is right. I'm going to check with somebody else." But, you want to come at me hard, I am going to come back harder at you. And then if I can't jam my fingers down your throat, then I am not worth it. But you have basically gone over the line. If you want to ask questions, ask questions. I put forward a model. But a little bit of respect.

Wow, this guy sounds like an A-1 psychopath (who happens to think he's a super-smart intellectual ... but is just low-rent alt-right sophist).

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iehi-feed-65266 Mon, 30 Mar 2020 15:30:26 GMT Facing Coronavirus, America Chose Mass Unemployment http://implode-explode.com/viewnews/2020-03-30_FacingCoronavirusAmericaChoseMassUnemployment.html [Our political leaders] appear to regard mass unemployment as an unfortunate but unavoidable symptom of the coronavirus. "It's nobody's fault, certainly not in this country," President Trump said Thursday. The federal government's primary response is a bill that passed the Senate late Wednesday night that would provide larger cash payments to those who have lost their jobs.

But the sudden collapse of employment was not inevitable. It is instead a disastrous failure of public policy that has caused immediate harm to the lives of millions of Americans, and that is likely to leave a lasting mark on their future, on the economy and on our society.

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A number of European countries, after similarly failing to control the spread of the virus, and thus being forced to lock down large parts of their economies, have chosen to protect jobs. Denmark has agreed to compensate Danish employers for up to 90 percent of their workers' salaries. In the Netherlands, companies facing a loss of at least 20 percent of their revenue can similarly apply for the government to cover 90 percent of payroll. And the United Kingdom announced that it would pay up to 80 percent of the wage bill for as many companies as needed the help, with no cap on the total amount of public spending.

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iehi-feed-65265 Sun, 29 Mar 2020 20:22:26 GMT Market Panic: The Wild Hunt for 100-Ounce Gold Bars http://implode-explode.com/viewnews/2020-03-29_MarketPanicTheWildHuntfor100OunceGoldBars.html At the center of it all are a small band of traders who for years had cashed in on what had always been a sure-fire bet: shorting gold in the futures market. Usually, they'd ride the trade out till the end of the contract when they'd have a couple of options to get out without marking much, if any, loss.

But the virus, and the global economic collapse that it's sparking, have created such extreme price distortions that those easy-exit options disappeared on them. Which means that they suddenly faced the threat of having to deliver actual gold bars to the buyers of the contract upon maturity.

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Signs of distress picked up on Friday, March 20, when the cost to swap New York futures and spot physical gold in London -- the world's biggest market -- rose to about $2. Typically, this trade cost almost nothing. After the close of the next session on Monday, that premium had jumped further to $6.75.

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The spread between April and June futures contracts on Tuesday jumped to $20 an ounce, meaning it cost that much more to buy metal for April than it did for two months later. That signaled more near-term demand for bullion and the need to soon have physical supply in hand.

By the end of the week, though, the situation had flipped. The June contract cost almost $30 more than the April contract, suggesting that traders appetite for physical gold has subsided for now.

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iehi-feed-65262 Thu, 26 Mar 2020 15:17:10 GMT Nearly 3.3 Million People Lost Their Jobs In Just One Week Because of Coronavirus http://implode-explode.com/viewnews/2020-03-26_Nearly33MillionPeopleLostTheirJobsInJustOneWeekBecauseofCoronavi.html iehi-feed-65261 Thu, 26 Mar 2020 15:12:10 GMT COVID-19's Devastating Effects on Jobs and Businesses http://implode-explode.com/viewnews/2020-03-26_COVID19sDevastatingEffectsonJobsandBusinesses.html iehi-feed-65260 Wed, 25 Mar 2020 15:26:07 GMT Lawmakers and White House agree to $2 trillion coronavirus stimulus bill after marathon negotiations http://implode-explode.com/viewnews/2020-03-25_LawmakersandWhiteHouseagreeto2trillioncoronavirusstimulusbillaft.html The package includes direct deposits for many Americans, $367 billion for loans to small businesses and an unprecedented program that will allocate $500 billion to the Treasury Department. Some of that money will be used to guarantee a Federal Reserve loan program for small and midsize businesses. Larry Kudlow, director of the White House's National Economic Council, said the funds could be leveraged into $4 trillion in lending through the Fed.

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The measure includes $367 billion in loans for small businesses. If the companies don't make any changes to payroll, these loans will be forgiven.

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iehi-feed-65257 Tue, 24 Mar 2020 15:28:11 GMT Whatever It Takes: How the Fed Aims to Rescue the Economy http://implode-explode.com/viewnews/2020-03-24_WhateverItTakesHowtheFedAimstoRescuetheEconomy.html