Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-63885 Fri, 20 Apr 2018 05:18:24 GMT Wells Fargo will be fined $1 billion http://implode-explode.com/viewnews/2018-04-20_WellsFargowillbefined1billion.html Two federal regulators are close to fining Wells Fargo $1 billion for forcing customers into car insurance and charging mortgage borrowers unfair fees.

The hefty penalty will be announced as early as Friday by the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency, according to a person familiar with the enforcement action.

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Such a large fine would be a noteworthy move for the CFPB under Mick Mulvaney, the acting director appointed by President Trump.

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iehi-feed-63883 Thu, 19 Apr 2018 04:18:05 GMT Pharma bro Shkreli, denied minimum security camp, gets sent to federal prison in New Jersey http://implode-explode.com/viewnews/2018-04-19_PharmabroShkrelideniedminimumsecuritycampgetssenttofederalprison.html Shkreli, 35, in March had asked to be sent to the minimum-security camp adjacent to another federal prison in Pennsylvania, FCI Canaan. His sentencing judge endorsed that request. But the Bureau of Prisons has the last word in determining where to place its inmates.

[Shkreli's lawyer] Brafman previously said that Judge Kiyo Matsumoto's ruling last September that Shkreli was a public danger would prevent him from being sent to a minimum-security camp because of BOP guidelines.

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Matsumoto had said Shkreli was a danger as she revoked his bail for, among other things, his bizarre offer toFacebook followers of $5,000 for each strand of hair they managed to pull off the head of Hillary Clinton, who at the time was in the midst of a book tour.''

So basically he got himself sent to federal prison instead of camping by being a dick (totally superfluously -- Hillary Clinton didn't even have anything to do with his case, as unsavory as she might be).

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iehi-feed-63882 Thu, 19 Apr 2018 00:09:45 GMT World debt hits record $164 trillion as crisis hangover lingers http://implode-explode.com/viewnews/2018-04-18_Worlddebthitsrecord164trillionascrisishangoverlingers.html The world's debt load has ballooned to a record $164 trillion, a trend that could make it harder for countries to respond to the next recession and pay off debts if financing conditions tighten, the International Monetary Fund said.

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The global debt burden clouded the IMF's otherwise upbeat outlook of the world economy, which is in its strongest upswing since 2011. The fund on Tuesday forecast expansion of 3.9 per cent in 2018 and 2019, while saying in subsequent years the global economy could be impacted by tighter monetary policy and the fading effects of U.S. fiscal stimulus.

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The IMF figures bare the scale of the debt hangover from which the world is still recovering from a decade after the financial crisis pushed the global banking system to the brink, and tipped the world economy into recession. Governments increased spending to boost growth, while central banks resorted to unconventional methods to ease financing conditions, such as buying bonds.

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iehi-feed-63881 Wed, 18 Apr 2018 23:44:43 GMT UK government loses key Brexit Vote: Stuck with the Customs Union http://implode-explode.com/viewnews/2018-04-18_UKgovernmentloseskeyBrexitVoteStuckwiththeCustomsUnion.html iehi-feed-63880 Wed, 18 Apr 2018 19:30:17 GMT U.S. Debt Load Seen Worse Than Italy's by 2023, IMF Predicts http://implode-explode.com/viewnews/2018-04-18_USDebtLoadSeenWorseThanItalysby2023IMFPredicts.html iehi-feed-63879 Wed, 18 Apr 2018 19:27:26 GMT Bon-Ton Stores closing: See list of Boston Store, Carson's, Younkers http://implode-explode.com/viewnews/2018-04-18_BonTonStoresclosingSeelistofBostonStoreCarsonsYounkers.html Bon-Ton Stores, the corporate parent of several department store chains, has agreed to sell its assets to a group of debtholders and liquidators, likely setting the stage for going-out-of-business sales to start imminently.

The York, Pa.-based company's brands include Bon-Ton, Bergner's, Boston Store, Carson's, Elder-Beerman, Herberger's and Younkers.

Although it's not official yet, chances are high that all the locations will close. It's still possible the brands could live on in some fashion, such as online-only outlets under new ownership.

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Bon-Ton's approximately 250 locations are scattered throughout 23 states in the Midwest, Northeast and upper Great Plains.

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iehi-feed-63878 Wed, 18 Apr 2018 19:26:30 GMT US crude tops $68 for the first time in more than three years http://implode-explode.com/viewnews/2018-04-18_UScrudetops68forthefirsttimeinmorethanthreeyears.html iehi-feed-63872 Mon, 16 Apr 2018 15:41:18 GMT Bertucci's files Chapter 11 bankruptcy, may close stores http://implode-explode.com/viewnews/2018-04-16_BertuccisfilesChapter11bankruptcymayclosestores.html For now, the company said it has 59 remaining operating locations and they are still open. But the company warned that it faces a serious risk of going out of business without a speedy bankruptcy sale.

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The chain has already slashed more than $5 million in costs through job cuts, lease concessions and other measures since the start of 2017.

But the casual dining sector's ailments were too much to overcome. Sales are below 2011 levels, according to a court filing.

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The company currently employs more than 4,200 workers. It has about $119 million in debt.

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iehi-feed-63868 Sun, 15 Apr 2018 17:34:06 GMT Lee Adler - This Uncanny Tool Has Been Right Since 1970;Here's What It's Telling You to Sell Now http://implode-explode.com/viewnews/2018-04-15_LeeAdlerThisUncannyToolHasBeenRightSince1970HeresWhatItsTellingY.html iehi-feed-63865 Sun, 15 Apr 2018 13:37:27 GMT "Elon Knew": New Lawsuit Alleges Musk Knowingly Lied About Model 3 Production http://implode-explode.com/viewnews/2018-04-15_ElonKnewNewLawsuitAllegesMuskKnowinglyLiedAboutModel3Production.html ...after claiming in May 2017 that the company was "on track" to meet its mass production goal, it's alleged the company hadn't even finished building its production lines, clearly meaning it wasn't "on track". The lawsuit alleges that Musk knew the line was "way behind"

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The suit alleges that the company's former CFO, Jason Wheeler - who is one of more than 50 key executives and VPs to have left the company over the last half decade or so - told Elon Musk personally that they wouldn't be able to mass produce by the end of 2017. The entire lawsuit is available at this link and some of the most interesting content was first shared by critics of the company on Twitter.

The drumbeat of accountability for Elon Musk continues to pound louder and louder as each day progresses, with some analysts calling for the SEC to investigate him if the company doesn't meet its stated cash flow positive and "no capital raise" guidance for the back end of 2018.

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iehi-feed-63864 Sun, 15 Apr 2018 13:27:46 GMT 247,977 stories in the Vacant City, priced out of reach for most http://implode-explode.com/viewnews/2018-04-15_247977storiesintheVacantCitypricedoutofreachformost.html Early numbers from the Census Bureau's Housing and Vacancy Survey show the unoccupied city has ballooned by 65,406 apartments since 2014, an astonishing 35% jump in size in the three years since the last survey.

Today, 247,977 units -- equivalent to more than 11% of all rental apartments in New York City -- sit either empty or scarcely occupied, even as many New Yorkers struggle to find an apartment they can afford.

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But that still leaves more than 100,000 units -- 74,945 occupied temporarily or seasonally, and 27,009 held off the market for unexplained reasons.

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Additionally, many of the 75,000 temporary apartments are pied-à-terres, weekend or vacation crash pads for the rich, up from just 9,282 in 1987.

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Rewind again to 1987. The city, still recovering from decades of arson and abandonment, had 6,241 apartments that were vacant because they were too dilapidated to inhabit -- down from nearly 23,000 in 1975. The median asking rent for someone looking for an apartment to move into that year was $450 -- just 14% higher than median rent existing tenants paid.

Given the apparent benefits of bringing busted-up apartments back into use, it was possible to argue that encouraging more renovation and construction would be good for the city.

In 2017, the Census Bureau couldn't even locate enough dilapidated apartments to count -- but did find a median asking rent of $1,875, 30% higher than what a typical existing tenant pays. What's more, the vacancy rate for those expensive units is huge. Almost half the apartments available for rent in New York cost more than $2,000 a month -- and the vacancy rate for them is above 7%.

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More than 63,000 New Yorkers are living in homeless shelters (almost three times more than in 1987), and 30% of city households are shelling out more than half their income in rent. What they and all New Yorkers need is not simply the construction of more housing, but better means to keep rents within reach.

This is starting to be brought back in line by a price crash, now. Of course, that won't bring down the vacancy numbers for a while, as new supply is added even faster.

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iehi-feed-63863 Sun, 15 Apr 2018 13:22:27 GMT Subprime mortgages morph into 'non-prime' loans--and demand soars http://implode-explode.com/viewnews/2018-04-15_Subprimemortgagesmorphintononprimeloansanddemandsoars.html Carrington is not alone in the space. Angel Oak began offering and securitizing nonprime mortgages two years ago and has done six nonprime securitizations so far. It recently finalized its biggest securitization yet -- $329 million, comprising 905 mortgages with an average amount of about $363,000. Just more than 80 percent of the loans are nonprime.

Investors in Angel Oak's nonprime securitizations are, "a who's who of Wall Street," according to company representatives, citing hedge funds and insurance companies. Angel Oak's securitizations now total $1.3 billion in mortgage debt.

Angel Oak, along with Caliber Home Loans, have been the main players in the space, securitizing relatively few loans. That is clearly about to change in a big way, as demand is rising.

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Big banks are also getting in the game, both investing in the securities and funding the lenders, according to Sharga.

"It's large financial institutions. A lot of people with private capital sitting on the sidelines, who are very interested in this market and believe that as long as the risks are managed well, and companies like ours are particularly good at managing credit risk, that it's a good investment opportunity," he said.

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Last summer, Fannie Mae announced it would relax its lending standards for prime loans, allowing borrowers with higher debt and lower credit scores to obtain loans without additional risk overlays, such as large down payments and a year's worth of cash reserves.

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As a result, demand from buyers with higher debt exceeded all expectations. The share of high DTI loans jumped from 6 percent in January 2017 to nearly 20 percent by the end of February 2018, according to a study by the Urban Institute.

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The mortgage industry expectation was that Fannie Mae would mitigate the additional risk with other factors, like a higher necessary credit score, but that was not added. The mortgage insurers balked, since they would be on the hook for the risk, so last month Fannie Mae "recalibrated" its risk assessment criteria again.

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iehi-feed-63862 Sat, 14 Apr 2018 22:40:07 GMT A Sidelined Wall Street Legend Bets on Bitcoin (NOVOGRATZ) http://implode-explode.com/viewnews/2018-04-14_ASidelinedWallStreetLegendBetsonBitcoinNOVOGRATZ.html Novogratz has certainly been making the most of the speculative bubble to rebuild his fortune, but he claims to be invested in the utopian aspects of blockchain as well. He doesn't think that cryptocurrencies will replace the dollar or the yen, but he believes that they will be a boon to countries in the developing world, where people don't have trust in their fiat currencies, and that blockchain can revolutionize the way information is logged and shared and, in our age of data breaches, protected. "I'm good at selling the dream," he said. "I can get onstage and get people to start saying ‘Hallelujah! Hallelujah!' "

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By the fall [of 2017], Novogratz was a billionaire once more. The price of a single bitcoin had been close to three thousand dollars during the summer; now it was clawing at five thousand. I visited him one Wednesday in October, at his office, walking in past a large statue of Evel Knievel in the lobby--the base reads "Bones heal, pain is temporary and chicks dig scars." Plush sofas were occupied by representatives of the Brown University endowment, a member of the board of Tesla, and the heads of a major publicity firm, among others.

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Two weeks earlier, Novogratz had announced his decision to rejoin the hedge-fund world and launch a cryptocurrency fund with a hundred and fifty million dollars of the money he had personally made on crypto and three hundred and fifty million from outside investors.

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After bitcoin and other currencies soared over the summer and fall, Novogratz presented this stage of crypto as a "speculative mania phase" that would crash like the dot-com bust but then reëmerge with more mature players. Out with AltaVista, in with Google. In Novogratz's estimation, individual cryptocurrencies would fail--although he is bullish on bitcoin and ether retaining their value in the long term. "I don't know if the speculative phase ends in March, ends in a year from now, eighteen months from now," Novogratz told me, "but it will end." He suggested that it will end when "too many people have bought in." (At a dinner during the fall of 2017, one of my favorite Oberlin professors, a Marxist, told me that he had just bought some ether.)

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Novogratz's cryptocurrency hedge fund never launched. In December, after the price of a single bitcoin rocketed to more than nineteen thousand dollars, Novogratz told me that "it would be a different proposition raising a crypto hedge fund today than it was three months ago." He said he was not comfortable running other people's money when the currency was at its peak, and predicted that bitcoin would consolidate at between eight and sixteen thousand dollars. "I'd rather look stupid than be stupid," he added. Right after he told me of his plans to shelve his hedge fund, bitcoin experienced one of its habitual micro-crashes, falling to under fourteen thousand dollars a coin.

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Novogratz had described another idea to me, one several magnitudes more audacious--certainly more institutional, and potentially more durable--than a mere half-a-billion-dollar hedge fund. He wanted to launch a publicly traded merchant bank solely for cryptocurrencies, which, with characteristic immodesty, he described as "the Goldman Sachs of crypto," and was calling Galaxy Digital. "I'm either going to look like a genius or an idiot," he said.

Novogratz announced the bank's launch in early January, the same week that Dimon, of JPMorgan Chase, who is one of the most vocal critics of cryptocurrency, publicly regretted calling bitcoin a fraud ("The blockchain is real," he told Fox Business). Shortly afterward, I sat down with Novogratz in his Tribeca apartment's far-flung kitchen to discuss Galaxy Digital.

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The new entity's launch was not so much an I.P.O. as a complex R.T.O., or reverse takeover, involving a Canadian shell company called Bradmer Pharmaceuticals. Galaxy Digital would still be based in New York, but because Canada offered easier and faster access to the public market Novogratz had decided to launch on the Canadian TSX venture exchange, with plans to eventually transfer to Canada's main exchange. He would contribute around three hundred and fifty million dollars, while raising another two hundred and fifty million dollars.

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iehi-feed-63860 Fri, 13 Apr 2018 15:15:14 GMT Big Banks Start Off Earnings Season With A Bang, Surpassing Expectations http://implode-explode.com/viewnews/2018-04-13_BigBanksStartOffEarningsSeasonWithABangSurpassingExpectations.html Beneath the headline numbers there are some early takeaways: First, JP Morgan really had an excellent quarter overall, but keep in mind that the company's revenue did benefit from an accounting rule. Also, currency and commodity trading did great but the fixed income desk didn't do as well as some people thought it would. It's important to hear what Mr. Dimon has to say later today... These are mostly minor quibbles, and pre-market trading showed gains for all three of the banks.

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Bank earnings could possibly provide some stability for the market after months of jumpiness. Perhaps more important than the numbers is what bank CEOs say on their earnings calls. If they see smooth sailing ahead and aren't overly worried about tariffs, that could potentially give the market a tailwind.

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iehi-feed-63859 Fri, 13 Apr 2018 14:54:26 GMT Wells Fargo faces $1 billion fine to settle loan abuses http://implode-explode.com/viewnews/2018-04-13_WellsFargofaces1billionfinetosettleloanabuses.html Wells Fargo & Co (has been offered a penalty of $1 billion by regulators to resolve outstanding investigations related to auto insurance and mortgage lending abuses, the third-largest U.S. bank by assets said on Friday.

The bank said it may have to revise its quarterly results to reflect the final settlement.'

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Wells Fargo is reeling from heavy costs and penalties related to the sales practices scandal, which came to light in 2016 and led to the ouster of ex-CEO John Stumpf and other senior management. Executives were grilled in several appearances before the U.S. Congress.

The U.S. Federal Reserve has also imposed restrictions on the bank's growth, forbidding it to expand its balance sheet beyond 2017 levels until it makes internal changes that addressed its board and risk management.

The restrictions on balance sheet growth will cut its annual profit by $300 million to $400 million this year, Wells Fargo said.

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iehi-feed-63858 Thu, 12 Apr 2018 21:13:26 GMT Trump directs top economic advisers to look at re-entering TPP http://implode-explode.com/viewnews/2018-04-12_TrumpdirectstopeconomicadviserstolookatreenteringTPP.html President Trump has directed his top economic and trade advisers to look into re-entering the Trans-Pacific Partnership, nearly a year after he withdrew the U.S. from the multilateral trade agreement in of his first acts as president.

Trump told a group of Republican senators during a meeting Thursday that he had assigned National Economic Council Chairman Larry Kudlow and U.S. Trade Representative Robert Lighthizer "the task of taking another look at TPP," Sen. Pat Roberts, chairman of the Senate Committee on Agriculture, told reporters at the White House.

"We're very excited about seeing those trade opportunities reaffirmed," said Sen. Deb Fischer, R-Neb., who was also present for the meeting. Fischer said Trump also mentioned "the importance" of the North Atlantic Free Trade Agreement, which his administration is currently renegotiating with Canada and Mexico.

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iehi-feed-63857 Thu, 12 Apr 2018 21:06:46 GMT Federal judges indicate they could remove Mulvaney as acting CFPB chief http://implode-explode.com/viewnews/2018-04-12_FederaljudgesindicatetheycouldremoveMulvaneyasactingCFPBchief.html ... two of the three judges from the U.S. Court of Appeals for the D.C. Circuit indicated they had a problem with the person Trump selected to take the position, Mick Mulvaney, because he also heads the White House Office of Management and Budget. The 2010 law that created the bureau as an independent federal agency specifically said OMB should not have oversight or jurisdiction over it.

That raised the possibility that the legal battle over the future of the watchdog agency could end with Mulvaney's removal as acting director -- a move that would be cheered by Democrats and consumer advocates who have complained about his public opposition to the bureau's existence.

But Mulvaney would not be supplanted as they want by Deputy Director Leandra English, who brought the suit to remove him after his appointment by Trump last fall. Under such a ruling, English might be elevated to acting director for at best a day or so until Trump simply named another person to serve as acting director, pending appointment of a permanent director needing Senate confirmation. Or the administration might appeal such a ruling to the full appeals court.''

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iehi-feed-63854 Wed, 11 Apr 2018 22:52:57 GMT Corker on new $1.9 tln deficit estimate: Tax cuts could be 'one of the worst votes I've made' http://implode-explode.com/viewnews/2018-04-11_Corkeronnew19tlndeficitestimateTaxcutscouldbeoneoftheworstvotesI.html Retiring Tennessee Sen. Bob Corker (R) said his vote on the GOP tax law could be one of the worst of his career if estimates that it will add $1.9 trillion to deficits over a decade prove correct.

"If it ends up costing what has been laid out here, it could well be one of the worst votes I've made," he said at a Senate Budget Committee hearing on the Congressional Budget Office (CBO) estimate that produced the figure.

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The new CBO estimate that the bill would cost $1.9 trillion through 2028 is higher than previous available estimates, largely because it includes the interest costs of servicing the debt, as well as more recent economic data. The Joint Committee on Taxation had estimated the bill would cost roughly $1.1 trillion over a decade at the time Corker cast his vote. Both estimates take into account the effects of economic growth on revenues.

This happened only slightly faster than we expected...

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iehi-feed-63853 Wed, 11 Apr 2018 22:43:41 GMT The Housing ATM is back: Cash-out share of all refis hits pre-crisis levels http://implode-explode.com/viewnews/2018-04-11_TheHousingATMisbackCashoutshareofallrefishitsprecrisislevels.html iehi-feed-63852 Wed, 11 Apr 2018 21:54:48 GMT Venezuela in apparent "Stealth Default"; stopped bond payments in September http://implode-explode.com/viewnews/2018-04-11_VenezuelainapparentStealthDefaultstoppedbondpaymentsinSeptember.html Venezuela stopped paying bondholders in September, according to central bank data, contradicting statements by President Nicolás Maduro that the country would continue to honour its debts while negotiating a resettlement with its creditors.The data show that regular foreign debt payments of hundreds of millions of dollars a month, in line with the country's sovereign obligations, fell to a few tens of millions from last October for fees and the legacy of a 1980s-era restructuring."This proves that Venezuela is deliberately hoodwinking bondholders and engaging in a stealth default," said Russ Dallen of boutique bank Caracas Capital, who follows Venezuelan debt closely.The data were posted in an Excel file as part of a recent revamp of the central bank's website and include monthly expenditures in US dollars on public foreign debt payments going back to 1996. Previously, data on foreign debt payments were published in the form of a ratio that revealed little information, Mr Dallen said. "This must have been posted by an intern," he added.

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The central bank data, which cover payments of sovereign debt only and exclude obligations by PDVSA and other state entities, show that just $83m was paid in October, compared with sovereign obligations amounting to $465m, according to data from Caracas Capital.Payments in November fell to $28m, compared with obligations of $183m, and in December declined to $23m, compared with obligations of $242m.

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"They have been doing it [defaulting] strategically to sow confusion. They have said they have begun the process of paying things they clearly did not pay, and blamed it all on sanctions."The US has imposed several rounds of sanctions on Venezuelan individuals and institutions. Adding to pressures last August, it also banned any involvement in new bonds or shares issued by the government or PDVSA. Last month it prohibited involvement in the country's proposed digital currency, the petro, as well

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