Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-60540 Sat, 27 Aug 2016 16:58:04 GMT Former Fed Governor Warsh Blasts Central Bank For "Manipulation"; Broken Policy http://implode-explode.com/viewnews/2016-08-27_FormerFedGovernorWarshBlastsCentralBankForManipulationBrokenPoli.html iehi-feed-60539 Sat, 27 Aug 2016 16:57:03 GMT Has the US Quietly Emptied the Denver Mint of Over 1,300 Tonnes of Gold? http://implode-explode.com/viewnews/2016-08-27_HastheUSQuietlyEmptiedtheDenverMintofOver1300TonnesofGold.html iehi-feed-60538 Sat, 27 Aug 2016 03:50:30 GMT The Global Real Estate Bubble Is OFFICIALY Bursting http://implode-explode.com/viewnews/2016-08-26_TheGlobalRealEstateBubbleIsOFFICIALYBursting.html iehi-feed-60537 Sat, 27 Aug 2016 01:58:03 GMT Drug companies spend millions to keep charging high prices http://implode-explode.com/viewnews/2016-08-26_Drugcompaniesspendmillionstokeepcharginghighprices.html The Drug Price Relief Act would make prescription drugs more affordable for people in Medi-Cal and other state programs by requiring that California pay no more than what's paid for the same drugs by the U.S. Department of Veterans Affairs. It would, in other words, protect state taxpayers from being ripped off.

Industry donations to crush the Drug Price Relief Act "will top $100 million by the election, I'm quite certain of it," said Michael Weinstein, president of the AIDS Healthcare Foundation and a leading backer of the state measure, also known as Proposition 61. "They see this as the apocalypse for their business model."

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It probably would make more sense if Medicare, with more than 55 million beneficiaries, served in that federal capacity rather than the VA. But Big Pharma, abetted by the industry's Republican cronies, has consistently blocked efforts to allow Medicare to negotiate drug prices. The VA has no such constraint.

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iehi-feed-60536 Fri, 26 Aug 2016 20:14:24 GMT Today's Federal Deficit Report Hints at Looming Financial Crisis in the U.S. http://implode-explode.com/viewnews/2016-08-26_TodaysFederalDeficitReportHintsatLoomingFinancialCrisisintheUS.html exiting what little "recovery" we had since the 2008 crash...]]> iehi-feed-60535 Fri, 26 Aug 2016 20:08:42 GMT U.S. Stocks Slip as Investors Ramp Bets for Rate Hike This Year http://implode-explode.com/viewnews/2016-08-26_USStocksSlipasInvestorsRampBetsforRateHikeThisYear.html U.S. stocks slipped in a volatile session, as remarks from Federal Reserve officials lifted optimism on the economy while also bolstering speculation interest rates could rise as soon as next month.

A speech by Fed Chair Janet Yellen sparked an early surge in equities amid a bullish economic assessment, which included a lack of clear guidance on when a rate boost may come. Equities then tumbled after Vice Chairman Stanley Fischer said Yellen's comments were consistent with a possible September increase, only to recover most of their losses in a final-hour rebound...

Expectations for a rate increase climbed after Fischer spoke, with traders pricing in a 42 percent probability of a move next month, from 32 percent after Yellen's remarks. Odds are now nearly 63 percent the central bank will act by December, up from 42 percent two weeks ago, based on fed fund futures data compiled by Bloomberg.

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iehi-feed-60533 Fri, 26 Aug 2016 18:13:38 GMT "QE-Infinity" Is Grinding the Global Economy to a Halt http://implode-explode.com/viewnews/2016-08-26_QEInfinityIsGrindingtheGlobalEconomytoaHalt.html Alberto Gallo, head of macro strategies and manager of the Algebris Macro Credit Fund, describes this paradox as "QE infinity," whereby low rates and seemingly endless rounds of bond-buying programs encourage cheap borrowing, and investment in financial markets -- but not in the real economy.'

"The problem is rising debt and monetary easing comes with many collateral effects. One is the distortion of asset prices, leading to asset bubbles," Gallo explained on his website.

"Asset price distortion also has a ripple effect on wealth distribution, increasing inequality by benefitting the already-wealthy who are more likely to hold financial assets. Over time, low rates and QE can also encourage misallocation of resources to leverage-sensitive sectors, including real estate and construction."

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iehi-feed-60531 Fri, 26 Aug 2016 15:02:03 GMT Portugal Gets EU Approval to Inject $5 bln Into Ailing Bank http://implode-explode.com/viewnews/2016-08-26_PortugalGetsEUApprovaltoInject5blnIntoAilingBank.html Portugal's plan to pump nearly 5 billion euros ($5.6 billion) into its biggest bank by assets is "another big step towards the stabilization of the Portuguese financial system," the country's financial minister told CNBC on Thursday.

The European Commission (the executive wing of the EU, of which Portugal is a member) and Portugal have agreed in principle to the recapitalization of state-owned Caixa Geral de Depósitos.

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The plan was agreed late on Tuesday afternoon. It would see Portugal pump up to 2.7 billion euros of state funds into Caixa, transfer 500 million euros of its ParCaixa shares to Caixa and convert 960 million euros of contingent convertible bonds into equity.

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Meanwhile, Caixa will issue highly subordinated debt worth around 1.0 billion euros that will be compliant with regulatory capital ratios designed to bolster banks' ability to withstand financial shocks.

This follows negotiations with Brussels officials, aimed at ensuring the plan is not viewed as state-aid to the bank, which would add to Portugal's problematically high budget deficit.

Although the government would put money into the bank, the hope is that the returns for the state would outweigh the cash injection.

Uh-huh. Since now we're obviously about to go into an economic boom period, we're sure the Portugese government will make money on this definitely-not-a-bailout cash injection...

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iehi-feed-60530 Fri, 26 Aug 2016 14:56:01 GMT Why are America's suburbs getting poorer? http://implode-explode.com/viewnews/2016-08-26_WhyareAmericassuburbsgettingpoorer.html Atlanta has seen a big rise in suburban poverty. Between 2000 and 2012 the rate increased by 159% in Atlanta's suburbs. But the region is not alone. For instance, in Denver the rate rose by 131% and in Portland by 98%.

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Rents, even in the suburbs, are rising and many of the best rental homes in suburban Atlanta are owned by private equity firms. Many of these firms swooped into the market during the recession, buying up foreclosed homes and fixing them up for renters. These houses are typically well-maintained, but come with higher monthly rents and higher credit requirements.

These are standards many in the region are struggling to meet. It's forced some to take up long-term residence in local motels that don't check credit and others to move several generations of a family into one home.

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iehi-feed-60529 Fri, 26 Aug 2016 14:50:26 GMT Yellen Says Rate-Hike Case ‘Has Strengthened in Recent Months' http://implode-explode.com/viewnews/2016-08-26_YellenSaysRateHikeCaseHasStrengthenedinRecentMonths.html "In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months," she said in the text of a speech Friday to central bankers and economists in Jackson Hole, Wyoming.

She also said the economy is "nearing" the Fed's goals of full employment and stable prices. The Fed chair didn't discuss the specific timing of a rate move in her first public comments since June.

It's pretty clear that Yellen wants to re-claim some of the Fed's "ammunition" to be able to respond to the next (coming soon) crisis. However, the Fed has rewired the central banking system so that the Fed funds market is now almost completely bypassed, rendering any such "aid" the Fed could offer by lowering rates (or, "tightening" due to raising them) nearly meaningless -- more a matter of "perception management". The only real constraint or impact is the exchange rate impact of nominally higher or lower dollar rates. And ultimately, the Fed is constrained not to step too far out of line of the global pack, or risk too much dollar appreciation.

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iehi-feed-60528 Fri, 26 Aug 2016 14:44:22 GMT "Things Are Worse" - Dollar Stores' Startling Admission: Half Of US Consumers Are In Dire Straits http://implode-explode.com/viewnews/2016-08-26_ThingsAreWorseDollarStoresStartlingAdmissionHalfOfUSConsumersAre.html ``Discount retailer Dollar General said it was cutting prices on its most popular items such as bread, eggs and milk, intensifying a price war among already commoditized products with retail giant Wal-Mart Stores to win back falling market share. It shares fell the most on record, plunging by 18% after the company missed on revenue, blaming aggressive competition, lower food prices and reduction in SNAP, or food stamp, coverage in 20 key states.

... the biggest factor by far impacting the performance of both dollar stores was the sharp, adverse turn in the purchasing power of the lower half of US consumers.

Both Dollar General and Dollar Tree said pressures on their core lower-income shoppers contributed to the same-store sales misses that both retailers reported. On today's conference call, Dollar General CEO Todd Vasos said that he was surprised to admit that while on the surface things are supposed to be getting better, the reality is vastly different for low-income US consumers...

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iehi-feed-60527 Fri, 26 Aug 2016 14:41:06 GMT Japan July consumer prices post biggest annual fall in three yrs (TIME FOR A NIRP DOUBLE-DOWN?) http://implode-explode.com/viewnews/2016-08-26_JapanJulyconsumerpricespostbiggestannualfallinthreeyrsTIMEFORANI.html Japan's consumer prices fell in July by the most in more than three years as more firms delayed price hikes due to weak consumption, keeping the central bank under pressure to expand an already massive stimulus program.

The gloomy data reinforces a dominant market view that premier Shinzo Abe's stimulus program have failed to dislodge the deflationary mindset prevailing among businesses and consumers.

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"Given how prices are behaving and how the BOJ is asked to cooperate with Abe to beat deflation, it's very hard to think the BOJ will unwind stimulus any time soon," said Takeshi Minami, chief economist at Norinchukin Research Institute.

"Instead, the September analysis will probably lay the grounds for a deepening of negative interest rates."

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iehi-feed-60525 Thu, 25 Aug 2016 14:27:16 GMT French support for the EU project is crumbling on the Left and Right http://implode-explode.com/viewnews/2016-08-25_FrenchsupportfortheEUprojectiscrumblingontheLeftandRight.html The former economy minister says France voted for a left-wing French manifesto four years ago and ended up with a "right-wing German policy regime". This is objectively true. The vote was meaningless.

"I believe that we have reached the end of road for the European Union, and that France no longer has any interest in it. The EU has left us mired in crisis long after the rest of the world has moved on," he said. Mr Montebourg stops short of 'Frexit' but calls for the unilateral suspension of EU labour laws. "As far as I am concerned, the current treaties have elapsed.''

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The only practical way France can claw back competitiveness is through deeper deflation than in the rest of the eurozone, but this would prolong the slump and play havoc with nominal GDP and debt dynamics. It would be self-defeating.

There is no realistic possibility of genuine fiscal reflation in the eurozone, let alone a Keynesian New Deal. Mr Montebourg is right is concluding that France will remain paralyzed until it takes back its sovereign instruments.

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Marine Le Pen is ahead of [Sarkozy] in the polls, drawing steady support near 30pc with a heady brew of Leftwing economics and Rightwing nationalism - straight out of the 1930s. She promised to "end the nightmare of the European Union" and this too tells as much about the populist calculus.

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A Pew survey of Europe in June found that 61pc of French voters have an "unfavourable" view of the EU, higher than in Britain. These sorts of polls keep cropping up in France. They are invariably dismissed as rogue findings.

Professor Thomas Guénolé from 'Sciences Po' in Paris warns against wishful thinking. "Incredible as it may seem, a referendum on 'Frexit' would probably be lost by the European side. As in the UK, 'leave' would win," he said.

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iehi-feed-60523 Thu, 25 Aug 2016 14:04:50 GMT Finding work proves harder for world's youth http://implode-explode.com/viewnews/2016-08-25_Findingworkprovesharderforworldsyouth.html High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/0bbe354a-6951-11e6-ae5b-a7cc5dd5a28c.html#ixzz4ILvvWISn

Global youth unemployment has started to worsen again after three years of modest improvement, with young people in emerging economies such as Brazil particularly badly hit.

The number of unemployed 15- to 24-year-olds in the world is set to swell by half a million this year to 71m, according to forecasts from the International Labour Organisation, the UN agency. As a result, the youth jobless rate will edge up from 12.9 per cent in 2015 to 13.1 per cent, close to its peak of 13.2 per cent in 2013.

Many young people have struggled to find a secure foothold in the labour market since the financial crisis, leaving them particularly exposed to the ups and downs of the slow and uneven global recovery.

.. In total, almost 38 per cent of working young people in the world are in poverty, compared with about a quarter of all working adults....

The ILO said the persistent lack of decent jobs in many regions was also one of the drivers of international migration among young people. Its figures show that a fifth of the global youth population was willing to move permanently to another country last year.

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iehi-feed-60522 Thu, 25 Aug 2016 13:53:22 GMT U.S. raises concerns over European tax probe involving American companies (TRES IRONIQUE) http://implode-explode.com/viewnews/2016-08-25_USraisesconcernsoverEuropeantaxprobeinvolvingAmericancompaniesTR.html The U.S. Treasury took the unusual step Wednesday of publishing a detailed critique of the European Commission's investigations into alleged tax avoidance schemes by a group of U.S. firms, including Apple, Starbucks and Amazon.

Treasury said the commission's probes into whether U.S. firms unfairly benefited from low corporate tax rates in Europe "undermine" agreements on international tax law and could hurt U.S. taxpayers.

The U.S. does not like the EU's tax imperialism (which is growing to rival the U.S.'s in scale and scope) -- oh, the delicious irony.

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iehi-feed-60521 Thu, 25 Aug 2016 01:12:31 GMT British House-Buyers Dance With the Devil http://implode-explode.com/viewnews/2016-08-24_BritishHouseBuyersDanceWiththeDevil.html To outsiders, this property obsession seems a kind of collective madness... Brits' appetite for houses at inflated prices brings to mind former Citigroup boss Chuck Prince's infamous 2007 assertion that "as long as the music is playing [in terms of liquidity], you've got to get up and dance".

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Wavering prospective home-buyers are enticed by ultra-cheap mortgages, bolstered by the Bank of England cutting rates after the Brexit vote. So buying is still often cheaper than renting. And while falling interest rates raise big questions about company pension promises, buying a home at least gives you somewhere to live in retirement.

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Brits aren't mad, they're just trapped: prisoners of a system that conspires to keep prices high and houses in short supply. They know their government will do almost anything to prevent house prices collapsing. Buyers can already obtain loans from the government to help get on the housing ladder, a policy that will further inflate prices for those lucky enough to own property already. There are reports that Theresa May's government is preparing a fresh multi-billion pound housing stimulus -- albeit one that should support more development.

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Of course, it would be wrong not to look at the longer term. The pound's depreciation, the U.K.'s gaping current account deficit and relentlessly awful productivity say nothing good about the prospects for the economy. If Brexit leads to investment cuts, then jobs will go too. For now, though, British buyers will be compelled to continue their dance with the property market devil.

The pretend-wealth of highly-leveraged housing is all fun and games until prices crash (whether because of intrinsic exhaustion or the economy sputtering), and you're upside-down...

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iehi-feed-60520 Thu, 25 Aug 2016 00:35:40 GMT Investors controlling $13tn call on G20 leaders to ratify Paris climate agreement http://implode-explode.com/viewnews/2016-08-24_Investorscontrolling13tncallonG20leaderstoratifyParisclimateagre.html A group of 130 institutions that control US$13tn of investments have called on G20 nations to ratify the Paris agreement this year and accelerate investment in clean energy and forced disclosure of climate-related financial risk.

Countries that ratified the Paris agreement early would benefit from better policy certainty and would attract investment in low-carbon technology, the signatories said in a letter before the G20 heads of government meeting in September.

They called for strong carbon pricing to be implemented, as well as regulations that encouraged energy efficiency and renewable energy. Plans for how to phase out fossil fuels also needed to be developed, they said.

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iehi-feed-60519 Thu, 25 Aug 2016 00:32:36 GMT Illinois governor's office warns of crippling pension payment hike http://implode-explode.com/viewnews/2016-08-24_Illinoisgovernorsofficewarnsofcripplingpensionpaymenthike.html Potential action this week by Illinois' biggest public pension fund could put a big dent in the state's already fragile finances, Governor Bruce Rauner's administration warned.

A Monday memo from a top Rauner aide said the Teachers' Retirement System (TRS) board could decide at its meeting this week to lower the assumed investment return rate, a move that would automatically boost Illinois' annual pension payment...

When TRS lowered the investment return rate to 7.5 percent from 8 percent in 2014 the state's pension payment increased by more than $200 million, according to the memo.

Illinois' fiscal 2017 pension payment to its five retirement systems was estimated at $7.9 billion, up from $7.617 billion in fiscal 2016 and $6.9 billion in fiscal 2015, according to a March report by a bipartisan legislative commission.

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iehi-feed-60518 Thu, 25 Aug 2016 00:12:10 GMT Forget "Brexit" - Referendum Looms in Italy; "Italeave" Increasingly Possible http://implode-explode.com/viewnews/2016-08-24_ForgetBrexitReferendumLoomsinItalyItaleaveIncreasinglyPossible.html The possibility of a "No" vote in Italy's constitutional referendum come October or November is the biggest clear and present danger to the euro's survival. Both 5-Star and the Northern League are promising a plebiscite on euro membership should they come to power in a post-referendum election... in the event of a "No" vote in October, the only economic choice for Italy would be between continued stagnation, or a return to the old economic model of successive devaluations. The latter course would naturally mean exiting the eurozone anyway.

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The chances of a "Yes" vote in the referendum have not been improved by the slump in Renzi's personal popularity following last year's attempt to reform the labor market, and a series of small bank restructurings that saw retail savers "bailed-in" -- forced to take losses -- under new European Union banking regulations. From 40% after Renzi entered office two years ago with optimistic promises of reform, the approval rating of the prime minister's PD party has fallen to little better than 30% today, much the same as that of the opposition 5-Star Movement. As a result, with two months to go the referendum is too close to call. Opinion polls indicate the "Yes" and "No" camps are running roughly equal, with a large proportion of voters still undecided.

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iehi-feed-60517 Wed, 24 Aug 2016 19:28:42 GMT Four more mega-banks join the (Blockchain) anti-dollar alliance http://implode-explode.com/viewnews/2016-08-24_FourmoremegabanksjointheBlockchainantidollaralliance.html

Today, four of the world's largest banks announced a brand new joint venture to create a new financial settlement protocol built on blockchain technology.

Deutsche Bank from Germany, UBS from Switzerland, Santander from Spain, and Bank of New York Mellon have joined together to launch what they're naming the very un-sexy "utility settlement coin".

Like Ripple, Setl, Monetas, and several other competing technologies, Utility Settlement Coin has the potential to end the reliance on the US banking system for cross-border payments and financial transactions.

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