Implode-Explode Heavy Industries news feed Tracking the many faces of the global credit implosion. en-us iehi-feed-64822 Fri, 19 Jul 2019 17:53:46 GMT This gold-related ETF is crushing the stock market's gains in 2019 -- and analysts say the metal has room to run The VanEck Vectors Gold Miners ETF GDX, -1.19% boasts a roughly 33% year-to-date gain, far surpassing gains of the underlying metal. Gold futures are up nearly 13% so far this year, by comparison, based on the most-active August contract trading on Comex GCQ19, -0.13% according to FactSet data. Prices of the yellow metal carved out a fresh six-year high at $1,428.10 an ounce, and gold miners have apparently been big beneficiaries.


o put the gains for the GDX, referring to the ETFs ticker symbol trading on the NYSE Arca, into perspective, the Dow Jones Industrial Average DJIA, +0.25% is up nearly 17% in 2019 so far, the S&P 500 SPX, +0.02% has gained more than 19%, while the Nasdaq Composite Index COMP, +0.06% boasts a rich 24% climb over the past seven months.

Fawad Razaqzada, market analyst at, said that gold has more room to run: "The bulls' next target could be the underside of the rising trend capping the prior highs, which comes in around $1460, with the psychologically-important $1500 hurdle being the subsequent objective," he wrote in a Thursday report.

Gold has benefited from a number of factors but popped in electronic trading late Thursday after New York Fed President John Williams made comments that the market implied as raising the likelihood that the Federal Reserve may take more aggressive action at the end of this month to stave off a tariff-induced slowdown in the economy. "When you only have so much stimulus at your disposal, it pays to act quickly to lower rates at the first sign of economic distress," Williams said at a research conference.

iehi-feed-64821 Fri, 19 Jul 2019 17:51:25 GMT Fed Vacillates As It Toys With Kind-of Promising A Rate Cut But Not Really On Thursday, investors got excited about the possibility of a bigger-than-expected interest rate cut. New York Fed President John Williams on Thursday said policy makers should take preventative measures at the first signs of economic slowdowns. The market took this to mean that a bigger interest rate cut was on the way.

Expectations of a half-percentage-point cut at the Fed's next meeting in two weeks more than doubled to 60% in response. Treasury yields and the US dollar slipped. But then a spokesperson clarified that Williams wasn't making any predictions about the Fed's monetary policy update due in two weeks. Expectations for a half-point cut retreated to 41% on Friday, although that was still more elevated than just two days ago.

In the latest attack on Fed policy, President Donald Trump tweeted that he preferred Williams first statement, calling it "100% correct that the Fed 'raised' far too fast and too early."

iehi-feed-64808 Fri, 12 Jul 2019 15:28:42 GMT Trump Reveals Himself Banksters' Water-Carrier On Cryptos iehi-feed-64807 Fri, 12 Jul 2019 12:33:32 GMT Facebook's Libra cryptocurrency project branded of ‘serious concern' by Federal Reserve The social networking giant wants to debut the coin in 2020 once financial partnerships are cemented in place and the proposed wallets used to store Libra are established with the same security measures as today's traditional bank accounts.

However, the US Federal Reserve wants Facebook to put its foot on the brake until a number of concerns have been addressed.


"Facebook has a couple billion-plus users, so I think you have for the first time the possibility of very broad adoption," Powell said. "It needs a careful look, so I strongly believe we all need to be taking our time with this."

Singapore, too, has concerns over the Libra project. Earlier this week, officials demanded that Facebook provide a more thorough explanation of Libra in order for the country to decide whether regulators need to investigate the proposal. 

However, Singapore's Monetary Authority of Singapore (MAS) said it is "open" to financial innovation, on the proviso that Facebook does not pose a threat to the local financial ecosystem.

iehi-feed-64791 Sat, 06 Jul 2019 00:40:17 GMT Giant Hedge Fund Renaissance Has Been Pulling Money Out of Deutsche Bank for Months Renaissance Technologies, the hedge fund giant that Deutsche Bank AG has counted as one of its largest clients, has been taking money out of its prime brokerage accounts with the German lender over the past few months, according to people familiar with the move.


Deutsche Bank Chief Executive Officer Christian Sewing is poised to present a sweeping overhaul of the troubled German lender, probably after a supervisory board meeting scheduled for Sunday. The restructuring plan may target the firm's struggling equities business for cuts, which houses the prime brokerage unit that caters specifically to hedge fund clients, people familiar with the matter have said.


The bank's hedge funds business has been shrinking for years. Through the end of last year, revenue from executing trades and lending securities to hedge funds was down by more than a third from 2015, people with knowledge of the matter told Bloomberg in March. Before that, it was one of the top players in the business, stealing share from the likes of Morgan Stanley and Goldman Sachs Group Inc. when they were reeling in the wake of the financial crisis.

iehi-feed-64789 Fri, 05 Jul 2019 02:35:11 GMT Walmart e-commerce is losing $1 billion as it tries to catch Amazon The company's US online sales increased 40 percent last year, buoyed by a successful expansion of an online grocery business; the digital-first brands and digital-first talent it has acquired have breathed new life into its portfolio; and it has shed at least part of its reputation for being a digital dinosaur.

Walmart is, by most measures, in a more competitive position than it was before it acquired Jet.

But it's still far behind Amazon, and inside Walmart, tensions are rising. Multiple sources tell Recode that the company is projecting losses of more than $1 billion for its US e-commerce division this year, on revenue of between $21 billion and $22 billion. Walmart does not disclose these figures publicly and declined to comment.

That size loss is an eye-popping figure for a company that is used to printing cash and that prides itself on its profitable operations; the overall Walmart business brought in nearly $7 billion in profits during the last fiscal year.


Lore has aggressively pitched the company's management and board on the idea that Walmart needs to spend billions a year on new warehouses if it's going to seriously compete online with "the Everything Store" and its speedy delivery offerings, sources say.

Amazon has 110 fulfillment centers in the US, while Walmart has 20 at most. Walmart's in-store selection is also not large enough to use stores to fulfill online general merchandise orders at a scale that would rival Amazon's product catalogue.

The problem is that building the online version of the Everything Store requires millions more products, and that means two things that Walmart's current infrastructure does not support: dozens more e-commerce warehouses and a lot more merchants and brands selling through

iehi-feed-64785 Mon, 01 Jul 2019 21:29:11 GMT Why Wall Street Owes Every U.S. Taxpayer $35,460 ... the average U.S. household has lost an estimated $4,236 in interest income due to the Fed's low interest rates (as opposed to a "normal" rate environment). In total, this has funneled $51.8 billion from the pockets of American savers into the coffers of Wall Street banks.


According to a report from the People's Policy Project think tank, the wealth of the bottom 50% is down $900 billion over the past 30 years.

Meanwhile, the wealth of the top 1% has increased by $21 trillion. Digging deeper, we found that at least $5 trillion of this was taken away from average investors, like you and your fellow readers.

Without getting too deep into how this "theft" occurred, I can tell you that the financial elites created a private investment market. Then they restricted access to this massive market to only themselves... cutting the rest of America out of the deal.

iehi-feed-64781 Sun, 30 Jun 2019 17:27:25 GMT Central bank plans to create digital currencies receive BIS endorsement Global central banks may have to issue their own digital currencies sooner than expected, the general manager of the Bank for International Settlements has said, after Facebook recently unveiled plans to create its own stablecoin.

Agustín Carstens, who heads the BIS, known as the central bankers' bank, told the Financial Times that the organisation supported the efforts of the world's central banks in creating digital versions of state currencies.

"Many central banks are working on it; we are working on it, supporting them," Mr Carstens told the Financial Times. "And it might be that it is sooner than we think that there is a market and we need to be able to provide central bank digital currencies."

A number of central banks, including Sweden's Riksbank, are working on their own versions of digital currencies, which would work by offering the public direct access to central bank money. At present, only private sector lenders can borrow directly from monetary authorities.


Facebook's plans to create Libra -- a stablecoin with its value pegged to a basket of as yet unspecified currencies backed by as yet unspecified assets -- have attracted attention from officials, including at the Basel-based BIS.

The BIS said in an extract on digital currencies, taken from its annual report, that coins backed by tech giants could "rapidly establish a dominant position" in global finance and pose a potential threat to competition, stability and social welfare.

"The issue is how will the currency be used? Will there be discovery of information, or data that can be used in credit provision and how will data privacy be protected?" Mr Carstens said. "A very simple way to regulate this is to start with anti-money laundering rules. That is a very immediate and very obvious concern."

iehi-feed-64780 Fri, 28 Jun 2019 19:02:01 GMT Zimbabwe Bans All Foreign Currency, De-Dollarizes, Returns To Dreaded Zim Zimbabwe's government has taken the controversial decision to ban local trading in foreign currencies, including the US dollar, with immediate effect.

It has also reintroduced the Zimbabwe dollar, which was abandoned because of hyperinflation in 2009 when the country mainly adopted the US dollar and the South African rand.

The move has shocked Zimbabweans, who have little faith in a local currency - the exchange rate when the Zimbabwe dollar was scrapped was Z$35 quadrillion to $1.

iehi-feed-64778 Wed, 19 Jun 2019 22:40:51 GMT Fed Holds Rates, But Signals Readiness To Cut (UNDER RELENTLESS TRUMP INTERFERENCE) "My colleagues and I have one overarching goal, to sustain the economic expansion," Powell told a press conference following the decision. He noted that apparent progress on trade talks had "turned to greater uncertainty" and many Fed officials "now see that the case for somewhat more accommodative policy has strengthened."

The shift followed attacks on the Fed by President Donald Trump for not doing more to bolster the economy and Tuesday's report by Bloomberg News that the president asked White House lawyers earlier this year to explore options for demoting Powell from the chairmanship.

Asked about the criticism, Powell said he thinks "the law is clear that I have a four-year term and I fully intend to serve it."

iehi-feed-64777 Wed, 19 Jun 2019 17:43:26 GMT Libra White Paper Shows How Facebook Learned From Bitcoin and Ethereum With the long-awaited Libra white paper, Facebook is showing off its blockchain smarts, and making a bid for crypto credibility. Released Tuesday morning, the 29-page paper describes a protocol designed to evolve as it powers a new global currency


As a first step toward achieving the "decentralized" part, the protocol has been turned over to a new organization, the Libra Association, whose members will hold separate tokens allowing them on-chain voting rights to govern decisions about Libra.

"Over time, it's designed to transition the node membership from these founding members who have a stake in the creation of the ecosystem to people who hold Libra and have a stake in the ecosystem as a whole," Ben Maurer, Facebook's blockchain technical lead, told CoinDesk in an exclusive interview.

In short, Libra is designed to be a high throughput, global blockchain, one that's built with programmable money in mind but limits how much users can do initially as it evolves from prototype to a robust ecosystem.

iehi-feed-64762 Tue, 04 Jun 2019 23:43:21 GMT The shadow banks are back with another big bad credit bubble Middle-market lending, of course, is just part of the biggest expansion in corporate borrowing the U.S. economy has ever seen, a result of eight years of cheap and easy money engineered by the Fed and other central banks after the 2008 financial crisis.

The ratio of corporate borrowing to a variety of metrics -- profits and assets, book value or the size of the overall economy -- is at or near an all-time high. So is the riskiness of the loans, reflecting the amount of debt companies have taken on, the absence of covenants and the rosy assumptions made about the amount of cash flow companies will have to cover debt service.

Meanwhile, the difference in interest rates between the safest loans and the riskiest -- in financial jargon, the "spread" -- is at historically low levels, a reliable indication of too much money chasing too few good lending opportunities. According to the latest "financial stability" reports from the Federal Reserve and the International Monetary Fund, all of these measures have gotten worse in the last two years, with many flashing yellow and red on their dashboards of systemic financial risk.


If all this newly borrowed money were being used to create new technology or enhance productivity, piling up all this debt might be a risk worth taking. But the evidence suggests that what it is mostly doing is artificially stimulating the economy. Companies have used much of this newly borrowed money to buy back their own shares, pay special dividends to private equity investors and acquire other companies, all of which have the effect of inflating stock prices. The recent wave of richly priced mergers and overpriced stock offerings, and the declining returns offered by recent commercial real estate deals, are all good indications of a credit bubble waiting to burst.

So, is this a replay of 2008?

... as before, this excess of supply relative to demand has led to a deterioration of lending standards that started in the shadow banking system and has now spread to regulated banks anxious about a further reduction in their market share. (My favorite stat: During the first three months of this year, according to Trepp, a data company, interest-only loans -- loans requiring no payback of principal until the loan is due -- accounted for three-quarters of all new commercial real estate loans.)


Perhaps the biggest similarity between the previous credit bubble and this one, however, is the stubborn reluctance of regulators to let some of the air out of the credit bubble before it bursts.

... The [Financial Stability Oversight] Council is headed by Treasury Secretary Stephen Mnuchin, a former Goldman Sachs investment banker who eventually made more than $10 million buying and selling -- with partners -- a California bank that, after engaging in aggressive mortgage lending, failed during the last housing crisis.


Powell, Quarles and Mnuchin are overconfident for the same reason Fed chairmen Alan Greenspan and Ben Bernanke and Treasury Secretary Henry Paulson were overconfident during the Bush years.

iehi-feed-64759 Tue, 04 Jun 2019 21:09:05 GMT Investors Suing JPMorgan May Redefine the Leveraged Loan Market A group suing JPMorgan Chase & Co. and other Wall Street banks over a loan that went sour four years ago is alleging the underwriters engaged in securities fraud. If successful, the lawsuit could radically transform the $1.2 trillion leveraged lending market.

The defendants say there's one key problem -- unlike bonds, loans aren't securities. As a result, they've filed a petition asking the court to dismiss the suit on those exact grounds...

The debate strikes at the heart of the leveraged loan market, which in recent years has come to look markedly similar to the higher-profile one for junk-rated bonds. The standardization of loan terms, the deterioration of covenants and the growth of secondary trading continue to blur the lines between the two. Should the plaintiff ultimately prevail, it would dramatically alter how American companies raise debt, according to two industry groups that filed a brief supporting the defendants' argument last week.

"There are absolutely enormous market consequences if a court determines that leveraged loans are securities," said J. Paul Forrester, a partner at law firm Mayer Brown who's not involved in the litigation. "Leveraged loans and lenders would be potentially subject to the same offering and disclosure requirements as securities and would face the same regulatory oversight and enforcement consequences.

The suit stems from a $1.8 billion loan that JPMorgan and others arranged for Millennium Health LLC -- then owned by private-equity firm TA Associates -- and sold to investors in 2014. Within a matter of months, lenders saw the value of their loan plunge as the company disclosed that federal authorities were investigating their billing practices. Millennium agreed to pay $256 million to resolve the probe, and would go on to file for bankruptcy.

JPMorgan knew U.S. officials were investigating Millennium when it sold the loan, but didn't tell investors who were about to buy the debt, Bloomberg reported in 2015. The bankers did not provide the information because Millennium told them it wasn't material at the time.

iehi-feed-64751 Fri, 31 May 2019 13:58:57 GMT How The Super Rich Are Buying Up Bitcoin The Dadiani Syndicate is described as a "peer to peer network," with people trading between each other; Dadiani claims her role is to put together people who want to sell and those who want to buy, just as she does in the art world.

... The trades so far have all been well into the millions of dollars, made up of thousands of trades per day... "The interest in bitcoin has never waned," said Dadiani, adding her art gallery has dabbled in cryptocurrency for years. "Though the media paints a very different picture."

iehi-feed-64748 Thu, 30 May 2019 17:24:16 GMT The Bond Market Is Trying to Tell Us Something (Worry) ...falling yields are to the economy what barometric pressure is to the weather: When they drop it's often a sign that some kind of storm is coming.

And lately, they've been falling fast. Everywhere. In Japan, Britain, Australia, Germany and the United States. Long-term yields on government bonds around the world are hitting some of their lowest levels in recent years.


Today, in the United States, a government bond that's due in three months will pay a higher rate than a government bond that is due in 10 years. These occurrences, called inversions, are rare, and they have grabbed Wall Street's attention for one simple reason: They have preceded every recession over the last 60 years (although some of those downturns took up to two years to materialize).


Since the Fed did an abrupt about-face on raising interest rates, investors have been slowly increasing the odds they put on the Fed actually starting to cut rates. And according to the bond market, those cuts are almost a done deal.

iehi-feed-64739 Fri, 24 May 2019 17:21:56 GMT Dow heads for fifth straight negative week, longest losing streak since 2011 Stocks were headed for weekly losses on Friday as investors worry the U.S.-China trade war is hurting economic growth.


U.S. durable goods orders dropped 2.1% last month amid a slowdown in exports and a buildup in inventories. This is the latest economic data set showing cracks in the economy while the world's largest economies engage in a trade war. IHS Markit said Thursday that U.S. manufacturing activity fell to a nine-year low.


"The growing worries around a US/China elongated trade battle and its implications on the tech space are heavily weighing on the minds of both investors and the companies themselves caught in the cross hairs," Dan Ives, analyst at Wedbush Securities, wrote in a note to clients. "The ‘poster child' for the US/China trade wars continue to be Apple with the stock under heavy pressure as many competitors are yelling fire in a crowded theater around the potential China impact to Cupertino if this situation worsens.

iehi-feed-64722 Sun, 19 May 2019 17:11:35 GMT Deutsche Bank Suppressed Trump, Kushner Money Laundering Alarms; Fired Whistleblower Anti-money laundering specialists at Deutsche Bank recommended in 2016 and 2017 that multiple transactions involving legal entities controlled by Donald J. Trump and his son-in-law, Jared Kushner, be reported to a federal financial-crimes watchdog.

The transactions, some of which involved Mr. Trump's now-defunct foundation, set off alerts in a computer system designed to detect illicit activity, according to five current and former bank employees. Compliance staff members who then reviewed the transactions prepared so-called suspicious activity reports that they believed should be sent to a unit of the Treasury Department that polices financial crimes.

But executives at Deutsche Bank, which has lent billions of dollars to the Trump and Kushner companies, rejected their employees' advice. The reports were never filed with the government.


Ms. McFadden [a longtime anti-money laundering specialist in Deutsche Bank's Jacksonville office] said she was terminated last year after she raised concerns about the bank's practices. Since then, she has filed complaints with the Securities and Exchange Commission and other regulators about the bank's anti-money-laundering enforcement.


Ms. McFadden said she had reviewed the transactions and found that money had moved from Kushner Companies to Russian individuals. She concluded that the transactions should be reported to the government -- in part because federal regulators had ordered Deutsche Bank, which had been caught laundering billions of dollars for Russians, to toughen its scrutiny of potentially illegal transactions.

... Typically, such a report would be reviewed by a team of anti-money laundering experts who are independent of the business line in which the transactions originated -- in this case, the private-banking division -- according to Ms. McFadden and two former Deutsche Bank managers.

That did not happen with this report. It went to managers in New York who were part of the private bank, which caters to the ultrawealthy. They felt Ms. McFadden's concerns were unfounded and opted not to submit the report to the government, the employees said.

Ms. McFadden and some of her colleagues said they believed the report had been killed to maintain the private-banking division's strong relationship with Mr. Kushner.

After Mr. Trump became president, transactions involving him and his companies were reviewed by an anti-financial crime team at the bank called the Special Investigations Unit. That team, based in Jacksonville, produced multiple suspicious activity reports involving different entities that Mr. Trump owned or controlled, according to three former Deutsche Bank employees who saw the reports in an internal computer system.

Some of those reports involved Mr. Trump's limited liability companies. At least one was related to transactions involving the Donald J. Trump Foundation, two employees said.

Deutsche Bank ultimately chose not to file those suspicious activity reports with the Treasury Department, either, according to three former employees. They said it was unusual for the bank to reject a series of reports involving the same high-profile client.

iehi-feed-64711 Fri, 10 May 2019 21:10:38 GMT Uber Drives Into a Ditch for its IPO ``Shares of Uber fell more than 7% on its first day of trading Friday, marking a rocky Wall Street debut for a company that endured plenty of bumps on its long road to going public. Uber opened at $42 a share, below its IPO price of $45, and ended the day even lower at $41.57.

That disappointing first day performance sets Uber apart from the vast majority of its tech peers. In the past five years, only 10% of venture capital-backed US technology IPOs finished the first day in the red, according to data provided to CNN Business from Renaissance Capital, which manages IPO-focused exchange-traded funds.

Uber did succeed in raising $8.1 billion in one of the largest public offerings ever, a substantial war chest that should fund the company's expansion into new cities and service categories. But that amount was still at the low end of what Uber originally set out to raise.


shares in Lyft fell below their IPO price on their second day of trading and have continued to tumble since. The stock is now down about 25% from the IPO price... tech companies that have come to market in recent years with massive losses -- including Lyft and Snap -- are currently "not trading above their IPO price."

iehi-feed-64710 Wed, 08 May 2019 22:57:51 GMT Cost of living between 2000 and 2019: Inflation has played a big part in shrinking the American middle class iehi-feed-64704 Sun, 05 May 2019 21:39:01 GMT Facebook Building Cryptocurrency-Based Payments System One idea under discussion is Facebook paying users fractions of a coin when they view ads, interact with other content or shop on its platform--not unlike loyalty points accrued at retailers, some of the people said.

This would reward the kind of genuine interaction that Facebook, beset by bots and hate speech, has been trying to encourage. It could also blunt criticism that the company makes billions of dollars on the backs of its users, sometimes in troubling or invasive ways.

Creating a so-called stablecoin backed by government currency better positions it as a legitimate payment method rather than a speculative bet. The volatility of bitcoin and other cryptocurrencies that aren't backed by hard assets has hampered their usefulness in payments.


Now Facebook must bend a variety of stakeholders to its vision. Most immediately are Visa and Mastercard Inc., whose networks handle the vast majority of credit and debit card payments in the U.S.

If it succeeds, the project threatens the card networks' dominance over global payments. Facebook comes armed with more than 1.5 billion daily users, many of them in developing countries where social-media sites provide the backbone of internet commerce.