Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-61491 Sun, 15 Jan 2017 17:57:43 GMT Trump/Congressional Proposed Tax Changes and How to Benefit from Them http://implode-explode.com/viewnews/2017-01-15_TrumpCongressionalProposedTaxChangesandHowtoBenefitfromThem.html iehi-feed-61490 Sun, 15 Jan 2017 15:06:55 GMT The President Who Wasn't There: Barack Obama's Legacy of Impotence http://implode-explode.com/viewnews/2017-01-15_ThePresidentWhoWasntThereBarackObamasLegacyofImpotence.html Obama assumed the presidency at a moment when much of the nation seemed ready to confront the unwelcome fact that the American project had derailed.... Corporate capitalism just wasn't delivering the goods anymore. Not for the bottom 80 percent, any way. The economy was in ruins, mired in what appeared to be a permanent recession. The manufacturing sector had been killed from the inside-out, with millions of well-paying jobs outsourced and nothing but dreary service-sector positions to take their place. Chronic long-term unemployment hovered at more than 10 percent, worse, much worse, in black America. Those who clung to their jobs had seen their wages stagnate, their home values shrivel and were suffocating under merciless mounds of debt. Meanwhile, capital moved in ever-tightening circles among a new odious breed of super-rich, making sweat-free billions from the facile movement of money.

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With his sunny disposition and Prospero-like aptitude for mystification, Obama should have been able to convert [the discontented] or, at least, to roll over them. Instead, they kicked his ass. How? ... Obama's most grievous political wounds were self-inflicted, starting even before his election when he rushed back to Washington to help rescue Bush's Wall Street bailout. This was perhaps the first real indication that the luminous campaign speeches about generational and systemic change masked the servile psyche of a man who was desperately yearning to be embraced by the nation's political and financial elites.

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iehi-feed-61489 Sun, 15 Jan 2017 02:40:01 GMT Icahn Hedge Fund Loses 20% of Its Value in 2016 http://implode-explode.com/viewnews/2017-01-14_IcahnHedgeFundLoses20ofItsValuein2016.html Billionaire Carl Icahn is coming off another poor investment year as a nearly $6 billion hedge fund that he oversees suffered a loss of 20.3% in 2016 after a decline of 18% in 2015, according to a disclosure in a regulatory filing in conjunction with a bond deal and rights offering being made by Icahn Enterprises (ticker: IEP), a publicly traded limited partnership that is controlled by Icahn.

The weak 2016 performance reflected Icahn's bearish stance as the fund had a sizable short position in the U.S. equity market that hurt results as the S&P 500 index gained almost 10% last year. The Icahn fund had a net short position of 138% at the end of the third quarter--fourth quarter positioning has not yet been disclosed.

It's ironic that Icahn, one of the Wall Street's prominent supporters of president-elect Donald Trump, failed to capitalize on the postelection market rally in stocks.

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iehi-feed-61488 Sun, 15 Jan 2017 02:36:53 GMT American Apparel Could Be A Puzzler For Trump: Can He Coerce a Bankrupt Company Bought And Moved Overseas By Foreigners? http://implode-explode.com/viewnews/2017-01-14_AmericanApparelCouldBeAPuzzlerForTrumpCanHeCoerceaBankruptCompan.html Gildan's purchase agreement covers American Apparel's assets, including most of its manufacturing and distribution equipment. Gildan bought American Apparel's existing inventory in a separate deal. But the company has declined the option to assume the leases of two Los Angeles manufacturing facilities that employ nearly 1,300 factory workers.

Gildan also declined the lease on American Apparel's headquarters, which employs nearly 2,200 people. The downtown offices will continue to manage the company's retail operations and website, but in December American Apparel warned all its Los Angeles-area employees that they may lose their jobs. Though the company might retain some operations in the United States, analysts expressed skepticism to the Los Angeles Times that any of American Apparel's current U.S. manufacturing workers would keep their jobs, speculating that Gildan would likely move factory work to its existing facilities in Honduras and the Dominican Republic.

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iehi-feed-61487 Sun, 15 Jan 2017 00:42:05 GMT Why DeLong, Summers, Bernanke, Krugman, Keen, Pettis, Edwards et al. Can't Figure Out "Secular Stagnation" http://implode-explode.com/viewnews/2017-01-14_WhyDeLongSummersBernankeKrugmanKeenPettisEdwardsetalCantFigureOu.html iehi-feed-61484 Sat, 14 Jan 2017 15:05:25 GMT Are Investors bracing for a massive stock-market selloff? http://implode-explode.com/viewnews/2017-01-14_AreInvestorsbracingforamassivestockmarketselloff.html Demand for one-month call options tied to the CBOE Volatility Index, a popular gauge of stock-market volatility, has spiked in the past week, a sign that some are bracing for a sharp downturn following the inauguration of President-elect Donald Trump.

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Since the beginning of the year, stock-market volatility has been relatively subdued despite increasing uncertainty surrounding the future direction of fiscal and monetary policy in the U.S. The Daily Shot, a popular market newsletter, illustrates this divergence in the chart below.

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iehi-feed-61483 Sat, 14 Jan 2017 15:03:20 GMT Addicted To Gov? Ben Carson And The 30 Year Mortgage Backstop http://implode-explode.com/viewnews/2017-01-14_AddictedToGovBenCarsonAndThe30YearMortgageBackstop.html iehi-feed-61482 Sat, 14 Jan 2017 03:24:58 GMT Carson will "Examine" FHA Premium Cut http://implode-explode.com/viewnews/2017-01-13_CarsonwillExamineFHAPremiumCut.html iehi-feed-61480 Fri, 13 Jan 2017 19:41:52 GMT JPMorgan, BofA make out like a bandits on post-Trump market surge http://implode-explode.com/viewnews/2017-01-13_JPMorganBofAmakeoutlikeabanditsonpostTrumpmarketsurge.html JPMorgan Chase & Co reported a 24 percent rise in fourth-quarter profits on Friday, beating analyst expectations, as its Wall Street business benefited from a surge in trading activity following the U.S. election... [ex-tax adjustments] the bank earned $1.58 per share, well above the average analyst estimate of $1.44 per share...

Revenue from fixed-income trading -- JPMorgan's most volatile business -- rose 31 percent to $3.4 billion, while stock trading revenue increased 8 percent to $1.2 billion. Bank of America Corp (BAC.N), which reported results earlier on Friday, also said trading revenue surged last quarter.

Here's a piece on BofA, to the same effect.

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iehi-feed-61478 Fri, 13 Jan 2017 17:33:07 GMT Core Retail Sales Growth Weakest In Almost 3 Years (CONTRADICTING NRF'S RAH-RAH REPORT) http://implode-explode.com/viewnews/2017-01-13_CoreRetailSalesGrowthWeakestInAlmost3YearsCONTRADICTINGNRFSRAHRA.html Earlier this week Bank of America warned that December retail sales could come in weaker than expected, when it looked at its internal credit and debt card spending data and found a 1.0% drop. Moments ago the official data released from the Dept of Commerce confirmed that once again BofA was right, when it announced that in December, US retail spending rose 0.6%, below the expected 0.7%, however much of this was thanks to spending on cars and gas. If one excludes autos, the rise was only 0.2%, below the 0.5% expected, and if one also excludes gas, there was no increase in spending in December whatsoever.

Meanwhile, the National Retail Federation is in full-on party-hats mode, trumpeting Holiday Sales Outpace Forecast Despite Department-Store Woes. We have a guess at what the true reality is...

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iehi-feed-61477 Fri, 13 Jan 2017 17:27:38 GMT US wholesale prices rise 0.3 pct., led by costlier gas, food http://implode-explode.com/viewnews/2017-01-13_USwholesalepricesrise03pctledbycostliergasfood.html December's gain was led by a big climb in wholesale gas prices, which rose 7.8 percent. Food prices increased 0.7 percent, with chicken eggs, a volatile category, jumping 69.3 percent. Fresh fruits and melons, which soared last month, declined by the most in more than six years.

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Consumers have seen higher prices in housing and health care in recent months. That's pushed up core consumer prices, which exclude food and energy, by 2.1 percent in the past year.

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iehi-feed-61476 Fri, 13 Jan 2017 16:51:16 GMT Millennials are falling behind their boomer parents http://implode-explode.com/viewnews/2017-01-13_Millennialsarefallingbehindtheirboomerparents.html With a median household income of $40,581, millennials earn 20 percent less than boomers did at the same stage of life, despite being better educated, according to a new analysis of Federal Reserve data by the advocacy group Young Invincibles.

The analysis being released Friday gives concrete details about a troubling generational divide that helps to explain much of the anxiety that defined the 2016 election. Millennials have half the net worth of boomers. Their home ownership rate is lower, while their student debt is drastically higher.

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The declining fortunes of millennials could impact boomers who are retired or on the cusp of retirement. Payroll taxes from millennials helps to finance the Social Security and Medicare benefits that many boomers receive -- programs that Trump has said won't be subject to spending cuts. And those same boomers will need younger generations to buy their homes and invest in the financial markets to protect their own savings.

But... but... but... but... isn't the answer to all economic problems "more education"?? Seriously, though -- this issue of millennials not socking-away enough to continue to float social security and the financial markets is a HUGE (yooge?), un-appreciated one...

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iehi-feed-61475 Fri, 13 Jan 2017 16:42:22 GMT Wells Fargo profit falls after sales scandal http://implode-explode.com/viewnews/2017-01-13_WellsFargoprofitfallsaftersalesscandal.html Wells Fargo & Co. reported a decline in fourth-quarter profit as moves in interest rates, a falloff in mortgage revenue and the bank's recent sales-tactics scandal weighed on the nation's third-largest bank.

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Since the scandal, new retail banking business such as customer checking account openings and credit card applications have fallen dramatically, including a drop of 40% and 43%, respectively, in December from a year ago.

Overall profits at Wells Fargo's community banking division, which includes the unit responsible for the questionable sales tactics, were $2.73 billion, a 15% decrease from the $3.3 billion it earned in the fourth quarter of 2015.

The scandal has boosted expenses, which are likely to remain high for some time. Wells Fargo CEO Timothy Sloan has said the bank expects to spend tens of millions of dollars to get through investigations and other regulatory matters related to its sales-practices scandal. Wells faces a spate of state and federal investigations, including by the Justice Department and the Securities and Exchange Commission.

Making matters worse, the higher costs come as interest rates remain at relatively low levels, despite a recent uptick. The result of this combination: Wells Fargo's return on equity continues to grind lower in the fourth quarter, at 10.94%, its lowest level in years.

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iehi-feed-61474 Fri, 13 Jan 2017 16:36:50 GMT Germany's Wolfgang Schaeuble urges ECB to start unwinding stimulus this year http://implode-explode.com/viewnews/2017-01-13_GermanysWolfgangSchaeubleurgesECBtostartunwindingstimulusthisyea.html The European Central Bank should start unwinding its ultra-loose monetary policy this year, German Finance Minister Wolfgang Schaeuble said in an interview to be published on Friday, adding that it would not be easy.

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He said forecasts that inflation could reach 3 percent in Germany this year would exacerbate concerns about current low interest rates.

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The conservative minister said it would take a great effort to convince German citizens that the common currency provided more employment, social and business benefits than risks and negative consequences.

To help Germany make the argument, he said it was essential that Italy and other countries stuck to the agreed rules.

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iehi-feed-61473 Fri, 13 Jan 2017 16:35:17 GMT Edwards: ‘Waste of time' to save Italian bank; Get Italy Out of Euro http://implode-explode.com/viewnews/2017-01-13_EdwardsWasteoftimetosaveItalianbankGetItalyOutofEuro.html iehi-feed-61472 Fri, 13 Jan 2017 16:30:55 GMT Mitchell Feierstein: Abolish central banks and slay the zombies http://implode-explode.com/viewnews/2017-01-13_MitchellFeiersteinAbolishcentralbanksandslaythezombies.html It's different this time -- or is it? The US Federal Reserve, the Bank of England and the European Central Bank have become gargantuan, out-of-control, rogue hedge funds. Global central banks have magicked up hundreds of trillions of dollars in debt and guarantees. Worldwide stock-market valuations are stratospheric -- buoyed by share buybacks, funded by record corporate debt and enabled by reckless central bank zero-interest-rate policies. The European Central Bank's purchase of massive amounts of corporate debt is pouring petrol on this blaze.

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As far as I'm concerned, Carney and former chancellor George Osborne used the levers of monetary policy to distort market-pricing mechanisms and normal price signals. As a result, insurance companies and pension-fund portfolios were loaded to the gills with "risky assets" that will bankrupt them when -- not if -- markets normalise.

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All of this has resulted in a UK commercial and residential property bubble that is ready to explode. In Chelsea and Kensington, property transaction volumes have plummeted. Prices collapsed nearly 15% in November as property agents quietly close shop and sack employees across London. 

Have the Bank-enabled grotesque bubbles in the bond, stock and property markets or the eight years of "temporary emergency measures" and zero-interest-rate policies created infrastructure investment? Job creation? Savings? No, no and no.

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JPMorgan, Deutsche and Nomura made a fortune -- and Monte's shareholders and depositors, and EU taxpayers, will get slammed with the massive bailout tab. The new normal is apparently a world of financial fraud where the only rules which apply are too big to fail, bail or jail and too connected to prosecute --steal all you can, while you can, with impunity.

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Capitalism without bankruptcy is like Catholicism without hell. And right now, we need to audit and abolish the Fed, the Bank and the ECB, which started this mess, and slay the zombies.

Desperate times call for desperate measures; we must create a "new global banking paradigm" -- pivoting far away from the West's broken models, which rely on the same PhD economists, academics and government bureaucrats who have destroyed our global financial system and capitalism, replacing it with a combination of Keynesian economic Kool-Aid and central bank "new normal" Marxism.

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iehi-feed-61471 Thu, 12 Jan 2017 18:05:51 GMT Le Pen Spotted at Trump Tower During Unannounced New York Visit http://implode-explode.com/viewnews/2017-01-12_LePenSpottedatTrumpTowerDuringUnannouncedNewYorkVisit.html French National Front leader Marine Le Pen was spotted at Trump Tower during an unannounced visit to New York less than four months before France's presidential election.

An aide to Le Pen, who leads in the latest opinion poll for the presidency, declined to comment on her reason for being in the lobby of the building on Thursday. Le Pen waved off reporters when approached.

Donald Trump had no plans to meet with Le Pen, according to an aide to the president-elect, who asked not to be identified without authorization to speak publicly. Neither is she on Trump chief strategist Steve Bannon's schedule, a person familiar said. Le Pen's campaign chief of staff, David Rachline, said earlier that she was making a private visit to New York.

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iehi-feed-61468 Thu, 12 Jan 2017 15:41:47 GMT Central Bank Cites Security Threat in India Cash Ban Decision Mystery http://implode-explode.com/viewnews/2017-01-12_CentralBankCitesSecurityThreatinIndiaCashBanDecisionMystery.html The cloak of secrecy that has shrouded the currency ban decision is likely to bolster the view that authorities, both on Mint Street and in New Delhi, were not prepared for such a decision and the way it was announced. It risks undermining perceptions of the central bank's independence and raises questions about Modi's decision-making style and his communication with the RBI.

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The RBI also claimed exemptions on two questions seeking detail on its preparations for the demonetization and studies it used to forecast the impact of the move. Sharing these "sensitive matters" would endanger India's sovereignty, integrity and security, according to the RBI

The use of those specific exemptions are "perplexing," Capital Economics's Shah said. Shailesh Gandhi, a former bureaucrat with the Central Information Commission, told the FirstPost website on Dec. 31 that the RBI's attitude of stonewalling smacked of "sheer arrogance."

"What the RBI is doing by refusing to answer queries under RTI is denying citizens their fundamental rights," Gandhi said.

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The move to ban high currency bank notes was an economic disaster with the worst yet to come, Former Prime Minister Manmohan Singh told a gathering of opposition Congress Party workers yesterday.

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"The institutional identity of the RBI has been damaged," former Governor Yaga Venugopal Reddy told CNBC this week. Rahul Gandhi, a leader of the main opposition Congress party, repeated the accusation, attacking Modi for ruining the credibility of the central bank.

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iehi-feed-61466 Thu, 12 Jan 2017 02:09:35 GMT The Looming Assault on the Federal Reserve http://implode-explode.com/viewnews/2017-01-11_TheLoomingAssaultontheFederalReserve.html THE NEW REGIME HATES THE FED: Donald Trump's supporters are remarkably unified on the Federal Reserve: It monetizes the debt, it creates asset bubbles, it is utterly nontransparent, it's controlled by Keynesians, its regulations hurt the economy, its bloated balance sheet will be impossible to wind down in an orderly manner, etc. But most importantly, the new regime thinks the Fed has too much power.

SO HERE WE GO, WITH "AUDIT THE FED" LEGISLATION likely to move quickly in the House. Sen. Rand Paul, an increasingly important player, has re-introduced his "Federal Reserve Transparency Act," which has a good chance of passing in the Senate as well. Paul will need 60 votes to break a filibuster, but some left-wing Democrats -- Bernie Sanders, Elizabeth Warren, Sherrod Brown, for example -- might support the bill. If it passes, Trump would sign it.

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OUR BOTTOM LINE: The Fed has its flaws, but it's largely apolitical -- you have to go back to Arthur Burns and Richard Nixon in the early 1970s to detect political deal-making. The concern in financial markets is that the Fed once again may be on the verge of politicization.

THAT CONCERN ON WALL STREET will be strongly conveyed to the Goldman Sachs faction in the Trump administration. These pragmatists may get Trump and his supporters to tone down the Fed bashing, but this issue may take on a life of its own -- as politicians in both parties squirm over rate hikes this year. If the funds rate is 75 basis points higher at the end of this year, the Fed will become a political pinata -- just as legislation to curb it is advancing.

Sorry, Barron's -- the point isn't how "political" the Fed is; the point is that it implements monetary mal-construction that has corrupted our banking system and economy to its core. So hopefully the new Audit the Fed Bill is merely a prelude to abolishing the Fed, substituting its worthwhile functions with a department of the Treasury, and introducing well as a gold-backed dollar calibrated to a level that wipes out a substantial amount of the public debt (and trade deficit). We can dream...

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iehi-feed-61464 Wed, 11 Jan 2017 23:17:10 GMT Mnuchin to Divest Stakes in 43 Investments to Avoid Conflict, But Already Talked Up Fannie/Freddie Holdings http://implode-explode.com/viewnews/2017-01-11_MnuchintoDivestStakesin43InvestmentstoAvoidConflictButAlreadyTal.html The disclosures reveal that Mnuchin may have benefited following his comments in a Nov. 30 interview that the government should exit control of Fannie Mae and Freddie Mac. The remarks sent shares of the mortgage-finance giants soaring. Mnuchin's filings show he's invested as much as $2 million in Paulson Advantage LP, which holds a stake in Fannie and Freddie.

The Paulson Advantage holdings are among 43 investments that he has pledged to divest within 90 days of being confirmed. The value of the divestitures is more than $75 million, based on Bloomberg calculations.

Some think Mnuchin won't get confirmed, and some think that Fannie and Freddie can't even be privatized. Interesting times!

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