Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-60493 Sun, 21 Aug 2016 13:45:14 GMT Meet the California Couple Who Uses More Water Than Every Home in Los Angeles Combined http://implode-explode.com/viewnews/2016-08-21_MeettheCaliforniaCoupleWhoUsesMoreWaterThanEveryHomeinLosAngeles.html The Resnicks are the world's biggest producers of pistachios and almonds, and they also hold vast groves of lemons, grapefruit, and navel oranges. All told, they claim to own America's second-largest produce company, worth an estimated $4.2 billion.

The Resnicks have amassed this empire by following a simple agricultural precept: Crops need water. Having shrewdly maneuvered the backroom politics of California's byzantine water rules, they are now thought to consume more of the state's water than any other family, farm, or company...

Such an incredible stockpiling of the state's most precious natural resource might have attracted more criticism were it not for the Resnicks' progressive bona fides. Last year, the couple's political and charitable donations topped $48 million. They've spent $15 million on the 2,500 residents of Lost Hills--roughly 600 of whom work for the couple--funding everything from sidewalks, parks, and playing fields to affordable housing, a preschool, and a health clinic.

... But skeptics note that the Resnicks' donations to Lost Hills began a few months after Earth Island Journal documented the yawning wealth gap between the couple and their company town, a dusty assemblage of trailer homes, dirt roads, and crumbling infrastructure...

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iehi-feed-60483 Fri, 19 Aug 2016 19:24:57 GMT Australia Blocks Power Grid Sale To China; Opening Rift Between Countries http://implode-explode.com/viewnews/2016-08-19_AustraliaBlocksPowerGridSaleToChinaOpeningRiftBetweenCountries.html China voiced anger on Friday over a decision by Australia to rule out on security grounds the preferred Chinese bidders for an energy grid potentially worth more than $7 billion and restart the sale process.

Australia's Treasurer Scott Morrison, who must approve major foreign investments, formally blocked the sale of Ausgrid to State Grid Corp of China and Hong Kong's Cheung Kong Infrastructure Holdings earlier in the day.

Last month, Britain said it would review plans to build two nuclear reactors at Hinkley Point with financial backing from China General Nuclear. Prime Minister Theresa May was concerned about the security implications of the proposed Chinese investment, a former colleague and a source said.

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Foreign bidders will likely need to restructure their deals and bring in local partners to succeed in Australia, said Matthew Fitzgerald, an Australian-based corporate partner at law firm Herbert Smith Freehills.

"One example would be that rather than have a majority Chinese consortium buying the asset, you might have three or four different investors, some of whom are Australian, some of whom are Chinese," Fitzgerald said.

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iehi-feed-60478 Fri, 19 Aug 2016 14:25:25 GMT A Commodities Rebound Is Accelerating in China's Neighborhood http://implode-explode.com/viewnews/2016-08-19_ACommoditiesReboundIsAcceleratinginChinasNeighborhood.html China may be slowing, but a commodities rebound is under way and the world's biggest miner knows where the next growth story is building -- emerging economies in Southeast Asia.

Combined gross domestic product in the ASEAN-5 nations -- Indonesia, Thailand, Malaysia, the Philippines and Vietnam -- will rise about a third to $3 trillion in the five years to 2020, fueling commodities-intensive infrastructure projects. Momentum like this across Asia will help maintain and increase commodity demand, BHP Billiton Ltd.'s Chief Executive Officer Andrew Mackenzie said this week. 

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Thailand is considering more than $50 billion of infrastructure spending, while Vietnam has begun major projects including a $10 billion rail modernization, Indonesia is seeking to accelerate road to ports programs and Philippine President Rodrigo Duterte has promised new railroads and airport runways. These markets are "back on their growth path after a period of under-performance," according to Lim.

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iehi-feed-60474 Fri, 19 Aug 2016 14:05:09 GMT Paul Singer and Elliott Management say bond market 'breakdown' to be 'sudden, intense, and large' http://implode-explode.com/viewnews/2016-08-19_PaulSingerandElliottManagementsaybondmarketbreakdowntobesuddenin.html In a bleak new letter to investors, Paul Singer's Elliott Management warns that the bond market is "broken" and that when the central bank actions of recent years no longer ward off a market downturn, the subsequent loss of confidence could be severe.

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Too much power has been ceded to central banks, the letter adds, the value of money has been debased, inflation is probably inevitable, and when it happens, it could be swift and impossible to tamp down.

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The letter discusses, at some length, the oddity of an investor mentality that flies to an asset class regarded as a "safe haven" even when there are low or nonexistent returns attached to it and no guarantee that current conditions will persist.

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Among other things, the letter adds, the hedge fund is seeing opportunity in the distressed-energy sector despite the rebound of oil and gas prices from their lows. The fund also has been building up its gold position "in a conditional format," to ebb losses "should prices fall back from their recent strength."

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iehi-feed-60473 Fri, 19 Aug 2016 13:59:03 GMT The Land of Genghis Khan Is Having an Epic Economic Meltdown http://implode-explode.com/viewnews/2016-08-19_TheLandofGenghisKhanIsHavinganEpicEconomicMeltdown.html Mongolia, a mineral-rich and landlocked $12 billion economy bordering Russia and China, is staring at a full-blown balance of payments crisis. It's caused barely a ripple in global financial markets, but the nation's economic meltdown offers instructive lessons to far bigger resource-reliant economies like Brazil, Venezuela, Russia and Saudi Arabia. 

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Stoked by a booming Chinese economy and brisk foreign direct investment flows, Mongolia was one of the fastest-growing economies in the decade that ended in 2015. Its economy clocked in with an average real GDP growth rate of 8 percent, while per capita income surged to about $4,000.

It all went bad when China's growth throttled back from double-digit levels in 2011, just as a coalition government led by Altankhuyag Norov went on a debt-fueled spending binge.

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"It seems unlikely that the country will be able to avert the need to restructure its debts or seek a bailout from the IMF," said Renata Lagierska, a senior associate at a Alaco, a London-based business intelligence consultancy.

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iehi-feed-60455 Tue, 16 Aug 2016 17:53:27 GMT Peak Gold (Production) is Here http://implode-explode.com/viewnews/2016-08-16_PeakGoldProductionisHere.html Last weekend, I went over the buying frenzy going on behind the scenes among gold miners and producers. Today, I want to expand on why this won't be an isolated event. There is a sustaining reason why this should continue for years to come. The case for peak gold is further reinforced by the amount of time needed to develop discoveries into producing mines.

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SNL discovered that, between 1985 and 1995, the average was about eight years. The time increased to 11 years between 1996 and 2005, then 18 years between 2006 to 2013. Then there are the estimates for 2018 and 2019, which only climb higher.

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iehi-feed-60450 Mon, 15 Aug 2016 21:18:16 GMT OPEC deal a tough task, as oil output freeze expectations rise http://implode-explode.com/viewnews/2016-08-15_OPECdealatoughtaskasoiloutputfreezeexpectationsrise.html OPEC will probably revive talks on freezing oil output levels when it meets non-OPEC nations next month as top exporter Saudi Arabia appears to want higher prices, according to OPEC sources, although Iran, Iraq and Russia present obstacles to a deal.

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"The comments by the Saudi energy minister give a ‎positive indication that they are willing to go for a freeze deal but the question remains: on what level?" said an OPEC source from a key Middle Eastern producer.

"Will the freeze be at January levels? And what about Iran‎?And then there is Nigeria, which has lost a lot of production since January," the source added.

Only days after Falih's remarks, Energy Minister Alexander Novak was quoted as saying Russia is consulting with Saudi Arabia and other producers to achieve oil market stability, adding that the door is still open for more discussions on output freeze, if needed.

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iehi-feed-60428 Sat, 13 Aug 2016 14:01:41 GMT Farmland Bubble Bursts As Ag Credit Conditions Crumble http://implode-explode.com/viewnews/2016-08-13_FarmlandBubbleBurstsAsAgCreditConditionsCrumble.html iehi-feed-60419 Thu, 11 Aug 2016 02:18:45 GMT Banks raising guard against possible JGB crash http://implode-explode.com/viewnews/2016-08-10_BanksraisingguardagainstpossibleJGBcrash.html Bank of Tokyo-Mitsubishi UFJ formally quit its role as a primary dealer of Japanese government bonds this July 15, a move that  reflects the lender's heightened sense of risk over a possible crash in the JGB market. The Mitsubishi UFJ Financial Group unit ran simulations gauging how fluctuating yields would affect its capital base. The results were not pretty.

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For a long time, Japanese banks regarded JGBs as essentially zero-risk assets when computing capital ratios. Once saddled with mountains of bad loans, the lenders had shied away from smaller businesses -- risky borrowers -- and instead flocked to JGBs, which promised quick profits, and developed a dependency on those instruments.

Nowadays, the safe-haven myth surrounding JGBs is starting to look shaky. When JGBs were generating yields on the plus side, investors suffered no loss if they held on to the bonds to maturity. But now, under the Bank of Japan's negative interest rate policy, JGBs have transformed into loss-laden assets.

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iehi-feed-60417 Wed, 10 Aug 2016 18:48:25 GMT For Oil Companies $110 Billion Debt Wall Looms Over Next 5 Years http://implode-explode.com/viewnews/2016-08-10_ForOilCompanies110BillionDebtWallLoomsOverNext5Years.html iehi-feed-60414 Wed, 10 Aug 2016 03:07:00 GMT Judging By Past Bulls, Gold Likely To Puncture $5000/oz Within A Half Decade http://implode-explode.com/viewnews/2016-08-09_JudgingByPastBullsGoldLikelyToPuncture5000ozWithinAHalfDecade.html iehi-feed-60408 Tue, 09 Aug 2016 16:29:42 GMT Once Foes Over Syria, Erdogan and Putin Look to Patch Things Up http://implode-explode.com/viewnews/2016-08-09_OnceFoesOverSyriaErdoganandPutinLooktoPatchThingsUp.html President Vladimir V. Putin of Russia and his Turkish counterpart, Recep Tayyip Erdogan, are expected to reconsider their dispute over Syria at a meeting on Tuesday in St. Petersburg, with both leaders interested in a public display of affection to show the West that strained ties have not left them isolated.

While Mr. Erdogan has long insisted that Syria's president, Bashar al-Assad, will need to cede power before any peace deal can be discussed, Russia's success on the battlefield, backed by Iran, may have altered the calculus.

Mr. Erdogan's visit to Russia, his first venture outside his country after a failed coup last month, is draped in symbolism because Turkey's relationships with the United States and the European Union have eroded significantly.

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the Kremlin never misses a chance to try to exploit cracks in the NATO alliance, and it has repeatedly expressed support for Mr. Erdogan since the coup attempt.

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Economic links are being restored, although local Russian producers do not want to compete with the same volume of imports of cucumbers and tomatoes, for example. The countries agreed to resume military contacts and counterterrorism cooperation.

On the resumption of economic links note, see Putin's Meeting With Erdogan Will 'Give the Green Light' to Turkish Stream.

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iehi-feed-60404 Tue, 09 Aug 2016 03:20:53 GMT We're in a Low-Growth World. How Did We Get Here? http://implode-explode.com/viewnews/2016-08-08_WereinaLowGrowthWorldHowDidWeGetHere.html One central fact about the global economy lurks just beneath the year's remarkable headlines: Economic growth in advanced nations has been weaker for longer than it has been in the lifetime of most people on earth.

The United States is adding jobs at a healthy clip, as a new report showed Friday, and the unemployment rate is relatively low. But that is happening despite a long-term trend of much lower growth, both in the United States and other advanced nations, than was evident for most of the post-World War II era.

This trend helps explain why incomes have risen so slowly since the turn of the century, especially for those who are not top earners. It is behind the cheap gasoline you put in the car and the ultralow interest rates you earn on your savings. It is crucial to understanding the rise of Donald J. Trump, Britain's vote to leave the European Union, and the rise of populist movements across Europe.

This slow growth is not some new phenomenon, but rather the way it has been for 15 years and counting. In the United States, per-person gross domestic product rose by an average of 2.2 percent a year from 1947 through 2000 -- but starting in 2001 has averaged only 0.9 percent. The economies of Western Europe and Japan have done worse than that.

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Larry Summers, the Harvard economist and a former top official in the Obama and Clinton administrations, watched as growth stayed low and inflation invisible after the 2008 crisis, despite extraordinary stimulus from central banks. Even before the crisis, economic growth had been relatively tepid despite a housing bubble, war spending and low interest rates.

In November 2013, he combined those observations into a much-discussed speech at an I.M.F. conference arguing that the global economy had, just maybe, settled into a state of "secular stagnation" in which there was insufficient demand, and resulting slow growth, low inflation and low interest rates... In this case, rather, as he has often put it: "Lack of demand creates lack of supply."

Mention of evil technology killing labor productivity (?) and "secular stagnation", as if either are independent forces. If they are true, then what is setting them off? No mention of the long-run corrosive influence of central banking, which eats away at the monetary and banking system, causing the gears of commerce and industrial development to grind down faster than they can build themselves up...

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iehi-feed-60403 Tue, 09 Aug 2016 03:07:58 GMT China's Marshall Plan http://implode-explode.com/viewnews/2016-08-08_ChinasMarshallPlan.html China's ambition to revive an ancient trading route stretching from Asia to Europe could leave an economic legacy bigger than the Marshall Plan or the European Union's enlargement, according to a new analysis.

Dubbed 'One Belt, One Road,' the plan to build rail, highways and ports will embolden China's soft power status by spreading economic prosperity during a time of heightened  political uncertainty in both the U.S. and EU, according to Stephen L. Jen, the chief executive officer at Eurizon SLJ Capital Ltd., who estimates a value of $1.4 trillion for the project. 

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With the potential to touch on 64 countries, 4.4 billion people and around 40 percent of the global economy, Jen estimates that the One Belt One Road project will be 12 times bigger in absolute dollar terms than the Marshall Plan. China may spend as much as 9 percent of gross domestic product -- about double the U.S.'s boost to post-war Europe in those terms.

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iehi-feed-60357 Tue, 02 Aug 2016 19:23:27 GMT Gold price rises back towards $1,360 as talk of US rate hikes fades http://implode-explode.com/viewnews/2016-08-02_Goldpricerisesbacktowards1360astalkofUSratehikesfades.html iehi-feed-60350 Tue, 02 Aug 2016 02:11:22 GMT Saudi Banks Offered $4BN Bailout To Avoid Liquidity Crisis http://implode-explode.com/viewnews/2016-08-01_SaudiBanksOffered4BNBailoutToAvoidLiquidityCrisis.html budget deficits -> more oil pumping -> even lower oil prices" can only end badly.'']]> iehi-feed-60345 Mon, 01 Aug 2016 14:42:49 GMT The Burrito Index: Consumer Prices Have Soared 160% Since 2001 http://implode-explode.com/viewnews/2016-08-01_TheBurritoIndexConsumerPricesHaveSoared160Since2001.html iehi-feed-60341 Sun, 31 Jul 2016 20:26:03 GMT A HUGE 45 Tonnes of Gold Stand For Delivery On First Day! http://implode-explode.com/viewnews/2016-07-31_AHUGE45TonnesofGoldStandForDeliveryOnFirstDay.html iehi-feed-60329 Fri, 29 Jul 2016 15:23:20 GMT Did GLD "Hostile Takeover" by "Non Profit" World Gold Body Cause Execs to Flee? http://implode-explode.com/viewnews/2016-07-29_DidGLDHostileTakeoverbyNonProfitWorldGoldBodyCauseExecstoFlee.html From the World Gold Council 2015 accounts, by 2015, all WGC member dues (from the gold mining company members) had been phased out to zero, and the bulk of revenue, $66.9 million, came from the Sponsor Fees from the SPDR Gold Trust. Total revenue was $68.8 million. This meant that as of 2015, the GLD (a commercial ETF) was basically funding all of the operations of the World Gold Council (a non-profit association)... GLD shareholders are [now] essentially bank-rolling the entire operations of the World Gold Council. I wonder how many GLD shareholders are aware of this.

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as you will see in a future post about the ‘GLD consent solicitation proxy vote campaign', because this was, in my opinion, a very misleading and confusing non-stop campaign that bordered on bullying GLD shareholders, especially the retail shareholders, this could have also taken its toll and resulted in CEO / CFO departures from the SPDR Gold Trust sponsor, i.e. New York based World Gold Trust Services.

Finally, it would be interesting to see what the large institutional shareholders of GLD such as Paulson and Blackrock make of this high turnover rate in GLD Sponsor executives, and what their corporate governance and proxy voting teams think of the WGTS driven GLD proxy solicitation campaign and the rather unusual governance structure of the World Gold Council and World Gold Trust Services.

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iehi-feed-60320 Thu, 28 Jul 2016 14:45:46 GMT U.S. diplomatic strategy on South China Sea appears to founder http://implode-explode.com/viewnews/2016-07-28_USdiplomaticstrategyonSouthChinaSeaappearstofounder.html Yet after the international court rejected Beijing's position, the U.S. calls for a united front appear to have made little headway, with only six countries joining Washington in insisting that the decision should be binding.

They include the Philippines, but not several other countries with their own claims to parts of the South China Sea that might benefit if Beijing observed the decision.

China also scored a major diplomatic victory earlier this week, when the Association of Southeast Asian Nations (ASEAN) dropped any reference to the ruling from a joint statement at the end of a meeting of the 10-country group's foreign minister in Laos. This followed objections from Cambodia, Beijing's closest ASEAN ally.

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"... the international community has voted by not saying anything. The consensus seems to be 'We don't care. We don't want to hold China to these standards.'" [said Greg Poling, a South China Sea expert at Washington's Center for Strategic and International Studies think-tank.]

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