Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-62472 Sun, 25 Jun 2017 19:30:04 GMT How Greece Became A Guinea Pig For A Cashless And Controlled Society http://implode-explode.com/viewnews/2017-06-25_HowGreeceBecameAGuineaPigForACashlessAndControlledSociety.html The International Monetary Fund (IMF), which day after day is busy "saving" economically suffering countries such as Greece, also happens to agree with this brave new worldview. In a working paper titled "The Macroeconomics of De-Cashing," which the IMF claims does not necessarily represent its official views, the fund nevertheless provides a blueprint with which governments around the world could begin to phase out cash...

Beginning July 27, dozens of categories of businesses in Greece will be required to install aptly-acronymized "POS" (point-of-sale) card readers and to accept payments by card. Businesses are also required to post a notice, typically by the entrance or point of sale, stating whether card payments are accepted or not. Another new piece of legislation, in effect as of June 1, requires salaries to be paid via direct electronic transfers to bank accounts. Furthermore, cash transactions of over 500 euros have been outlawed.

In Greece, where in the eyes of the state citizens are guilty even if proven innocent, capital controls have been implemented preventing ATM cash withdrawals of over 840 euros every two weeks. These capital controls, in varying forms, have been in place for two years with no end in sight, choking small businesses that are already suffering.

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The irony that [Greek pensioners, abiding by the new rules] were paying by card to avoid taxation themselves was lost on them--as is the fact that the otherwise fiscally responsible Germany, whose government never misses an opportunity to lecture the "spendthrift" and "irresponsible" Greeks, has the largest black market in Europe (exceeding 100 billion euros annually), ranks first in Europe in financial fraud, is the eighth-largest tax haven worldwide, and one of the top tax-evading countries in Europe.

Also lost on these otherwise elderly gentlemen was a fact not included in the official propaganda campaign: Germans happen to love their cash, as evidenced by the fierce opposition that met a government plan to outlaw cash payments of 5,000 euros or more. In addition, about 80 percent of transactions in Germany are still conducted in cash. The German tabloid Bild went as far as to publish an op-ed titled "Hands off our cash" in response to the proposed measure.

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iehi-feed-62470 Sun, 25 Jun 2017 14:34:06 GMT Why "How many jobs will be killed by AI?" is the wrong question http://implode-explode.com/viewnews/2017-06-25_WhyHowmanyjobswillbekilledbyAIisthewrongquestion.html Despite these scary statistics and scenarios, however, there's no need to panic. For one thing, previous predictions about losses and gains over time in specific jobs have almost always been way off, and there's little reason to believe the current crop will be any better. For another, the Oxford study looked only at destruction, and not also creation. It didn't try to estimate how many new jobs and job categories will come along with future technological progress. There will surely be many of these, from robot wranglers to AI interpreters.

[However, there are reasons for concern; for one,] despite very low apparent unemployment, there actually is a serious joblessness problem among some groups. How can this be? It's because people who have stopped looking for work altogether are not included when calculating the headline unemployment rate. And a surprisingly large percentage of prime-age men, especially less-educated ones, are in this category. According to a 2016 report from the White House, by 2014 more than 16% of US men between the ages of 25 and 54 with a high school education or less had dropped out of the workforce completely. Again, there are many reasons for this phenomenon. It appears that one of them is that many men who did or aspire to stereotypically brawny work like assembly line worker or coal miner are not eager to take available service sector jobs in growing areas like health care, eldercare and education. As automation takes over truck driving and other similar jobs this mismatch between desired and available jobs is likely to grow, as will the joblessness and attendant problems that come with it. 

Furthermore, less skilled workers who do find work often end up with stagnant wages. Real wages are essentially unchanged for the bottom 50% of the income distribution, even as income has grown overall, especially for the most educated and highly paid people in the workforce. This is reflected in growing inequality, but also in greater gaps on other metrics like suicide, alcoholism and drug abuse. As Anne Case and Angus Deaton have documented, "deaths from despair" have increased sharply among the white working class over the past 20 years, after falling in previous decades.

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iehi-feed-62467 Sun, 25 Jun 2017 13:56:31 GMT Robots That Make 400 Burgers an Hour May Soon Take over Fast Food Restaurants http://implode-explode.com/viewnews/2017-06-25_RobotsThatMake400BurgersanHourMaySoonTakeoverFastFoodRestaurants.html You don't need to worry about the line cook messing up your order any more. The BurgerBot is a totally automated burger creating machine! The machine can pump out 400 burgers an hour. But not just any 400 burgers, all the burgers can be made with fresh ground beef, salad, complete with a toasted bun.

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This robot has a pretty expensive outlay of $30,000 but you can imagine it would pay itself off very quickly. Tech blog Xconomy reported the prototype they saw demoed could save a fast-food restaurant up to $90,000 a year in training, salaries, and overhead costs.

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iehi-feed-62463 Sat, 24 Jun 2017 02:22:30 GMT Amazon Takeover of Whole Foods Puzzlingly Missing Any Economies of Scale http://implode-explode.com/viewnews/2017-06-23_AmazonTakeoverofWholeFoodsPuzzlinglyMissingAnyEconomiesofScale.html If Amazon.com Inc hopes to revolutionize grocery delivery, then its bid to buy Whole Foods Market Inc for $13.7 billion will be just the start of a long and costly process. The e-commerce giant would need to add a large network of specialized grocery distribution warehouses, former AmazonFresh employees and logistics experts said. This is something Wal-Mart Stores Inc and other competitors have already done. Whole Foods, with a relatively small distribution footprint of its own, does little to change the picture for Amazon, they said.

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Whole Foods has over 1 million square feet of warehouse space for distribution to its markets, and a chunk of its inventory goes straight from suppliers to stores, MWPVL said. "It's a peanut. It's nothing," MWPVL President Marc Wulfraat said of Whole Foods' distribution

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Even using Whole Foods stores to provide food for delivering to nearby urban shoppers would have hard limits, since many outlets lack the floor space to handle thousands of online orders.

"It's a space issue for stuff coming through. It's a labor issue for people tripping over each other," said Tom Furphy, former vice president of consumables and AmazonFresh, and now chief executive of Consumer Equity Partners. There would also be a risk that "the quality starts to go down because the e-commerce orders are getting better product."

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iehi-feed-62449 Thu, 22 Jun 2017 20:40:36 GMT The Rise of a Prince Ends Doubts Over Saudi Arabia's Direction (BUT RAISES DOUBTS OVER ITS INT'L STRATEGY) http://implode-explode.com/viewnews/2017-06-22_TheRiseofaPrinceEndsDoubtsOverSaudiArabiasDirectionBUTRAISESDOUB.html iehi-feed-62444 Wed, 21 Jun 2017 21:10:51 GMT High-Yield Carnage Stays Contained for Now - Bloomberg http://implode-explode.com/viewnews/2017-06-21_HighYieldCarnageStaysContainedforNowBloomberg.html Oil's latest foray into a bear market has left the world's biggest junk bond ETF mostly unscathed, with the damage so far contained to the energy sector.

Investors still aren't demanding higher overall premiums for the riskiest corporate debt and the $18.4 billion iShares iBoxx High Yield Corporate Bond ETF has gained 3.9 percent this year, even as credit spreads for energy companies widened to the highest since September after crude slid below $43 a barrel. 

"There may be more pain on the way" for the energy patch, warns Bloomberg Intelligence senior credit analyst Spencer Cutter.

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In 2015, "there was a significant lag between oil really cratering and credit catching up," writes Peter Tchir, head of macro strategy at Brean Capital LLC. "While I think the energy related credit selling was overdone by late 2015, it seems to me that we have hit a point yet again where the lag effect has to start kicking in -- credit can't ignore ongoing weakness for so long."

Yeah, everything bad is "contained" and will remain so, and everything bullish will continue forever... don't you just love it when we reach the point in market/crisis cycles that the word "contained" has to be trotted out? We're certainly reassured...

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iehi-feed-62423 Mon, 19 Jun 2017 00:55:02 GMT Amazon-Whole Foods Deal Is Bad News For Store Cashiers And The Fight For $15 Minimum Wage http://implode-explode.com/viewnews/2017-06-18_AmazonWholeFoodsDealIsBadNewsForStoreCashiersAndTheFightFor15Min.html Among the losers will be traditional neighborhood stores, which won't be able to compete with Amazon's razor thin operating margins -- and minimum wage employees like cashiers, as Amazon's technology will make them dispensable and speed  up a trend already underway in traditional retail chains...and in the process, make the $15 minimum wage irrelevant....

... other store chains will also have to do away with cashiers to keep up with Amazon, accelerating and broadening a trend already underway in the retail industry. Wal-Mart and Target have been using technology to replace labor that is usually paid the minimum wage.

Amazon's move comes as a franchise chain like Amazon -- McDonald's -- announced that it would be replacing cashiers with ordering kiosks. McDonald's is another company that operates at low margins; at least its franchises do, as the fast food market is highly competitive.

That's certainly bad news for the fight for $15 minimum wage movement. In fact, the movement may have helped Walmart, Target, Amazon, McDonald's and the like to step up the trend to replace workers, who are now more expensive than technology, which usually becomes more efficient and less costly over time.

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iehi-feed-62421 Sun, 18 Jun 2017 20:19:12 GMT The Swift, Shocking Collapse Of Theresa May And The Tories http://implode-explode.com/viewnews/2017-06-18_TheSwiftShockingCollapseOfTheresaMayAndTheTories.html Many of those [apparent Kremlin-sanctioned] murders took place while Theresa May was the Home Secretary and she herself has intervened in some of these cases. She personally intervened to protect "international relations" with Russia in delaying the investigation into the death of Alexander Litvinenko. She also was involved in the government's decision to withhold evidence in the death of another Russian, Alexander Perepilichny.

In addition, May has reduced the police budget by nearly $3 billion as part of the Conservatives' austerity budget and a switch in focus to anti-terrorism efforts. A number of senior police officials blame those cuts for reduced capabilities, especially in pursuing difficult investigations that these murders required.

That push for austerity also was a major factor in the next disaster to befall May and that was the horrific fire at the Grenfell tower. Apparently, the private building manager that the council had employed to upgrade the building used cladding that is banned in the US and Germany specifically because of the fire hazard. Using fireproof cladding would have cost just an additional 5,000 pounds.

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iehi-feed-62418 Fri, 16 Jun 2017 23:56:15 GMT For Whole Foods workers, fears of robots, drones and culture clash http://implode-explode.com/viewnews/2017-06-16_ForWholeFoodsworkersfearsofrobotsdronesandcultureclash.html iehi-feed-62410 Fri, 16 Jun 2017 14:09:28 GMT Amazon to Buy Whole Foods in $13.4 Billion Deal http://implode-explode.com/viewnews/2017-06-16_AmazontoBuyWholeFoodsin134BillionDeal.html Amazon said on Friday that it had agreed to buy the upscale supermarket chain Whole Foods for $13.4 billion, in the online retailer's latest push into the grocery business.

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Amazon has designs on expanding beyond online retail into physical stores. The company is slowly building a fleet of outlets, and much attention has been focused on its grocery store dreams. It has already made an initial push through AmazonFresh, its grocery delivery service.

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The e-commerce giant has been testing a variety of other retail concepts. It has opened a convenience store that does not need cashiers, and has explored another grocery store concept that could serve walk-in customers and act as a hub for home deliveries.

Under the terms of the proposed deal, Amazon would pay $42 a share, a 27 percent premium to Thursday's closing price.

Continue reading the main story

RELATED COVERAGE

A Price Amazon Is Content to Keep High: $1,000 a Share MAY 30, 2017

Amazon's Ambitions Unboxed: Stores for Furniture, Appliances and More MARCH 25, 2017

Whole Foods, Pressured by Restless Investors, Shakes Up Board MAY 10, 2017

Whole Foods has been feeling the heat to bolster its stock for more than a year.

John Mackey, a founder, took over as sole chief executive last year, in a bid to revive the company. Money managers, unhappy with the pace of the turnaround effort, have pushed for more, taking aim at the board, its grocery offerings and its pricey real estate holdings.

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iehi-feed-62404 Thu, 15 Jun 2017 15:08:18 GMT The Old Are Eating the Young - Satyajit Das http://implode-explode.com/viewnews/2017-06-15_TheOldAreEatingtheYoungSatyajitDas.html A significant proportion of recent economic growth has relied on borrowed money -- today standing at a dizzying 325 percent of global gross domestic product. Debt allows society to accelerate consumption, as borrowings are used to purchase something today against the promise of future repayment. Unfunded entitlements to social services, health care and pensions increase those liabilities. The bill for these commitments will soon become unsustainable, as demographic changes make it more difficult to meet.

Degradation of the environment results in future costs, too: either rehabilitation expenses or irreversible changes that affect living standards or quality of life. Profligate use of mispriced non-renewable natural resources denies these commodities to future generations or increases their cost.

The prevailing approach to dealing with these problems exacerbates generational tensions. The central strategy is "kicking the can down the road" or "extend and pretend," avoiding crucial decisions that would reduce current living standards, eschewing necessary sacrifices, and deferring problems with associated costs into the future.

Rather than reducing high borrowing levels, policy makers use financial engineering, such as quantitative easing and ultra-low or negative interest rates, to maintain them, hoping that a return to growth and just the right amount of inflation will lead to a recovery and allow the debt to be reduced.

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iehi-feed-62401 Wed, 14 Jun 2017 16:54:01 GMT OPEC oil production jumps in May despite cartel's output agreement as Iraq, Libya pump more http://implode-explode.com/viewnews/2017-06-14_OPECoilproductionjumpsinMaydespitecartelsoutputagreementasIraqLi.html Production across OPEC rose by about 336,100 barrels per day to 32.1 million bpd, according to secondary sources, led by increases from Libya and Nigeria, which are exempt from the deal, and Iraq.

Output from Libya surged by more than 178,000 bpd to 730,000 bpd as the country's rival factions moved toward reconciliation, and supplies disrupted throughout years of conflict remained on line.

In Nigeria, production was up more than 174,000 bpd to 1.68 million bpd as supplies sidelined by militant attacks on energy infrastructure last year came back into operation. With the gain, Nigeria reclaimed the title of largest African producer in OPEC from Angola, where output fell by 54,000 bpd, the biggest drop among the 13 members in May.

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Only four countries were producing at or below the levels they agreed to in November: Saudi Arabia, Angola, Kuwait, and Qatar.

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iehi-feed-62395 Tue, 13 Jun 2017 13:56:14 GMT US Oil Production Makes Waves, Swamping OPEC http://implode-explode.com/viewnews/2017-06-13_USOilProductionMakesWavesSwampingOPEC.html ... it's not just the US production numbers that are making waves: It's the spike in US crude oil exports. The US exported 830,000 barrels of crude per day in March, a whopping 64.2% increase year over year. In February, it exported 1.1 million barrels per day, a nearly 200% increase year over year...[per the WSJ,] the February numbers are closer to the new norm, as it expects the US to export, on average, roughly 1 million barrels per day in 2017.

This is a huge challenge for major oil producers, especially Saudi Arabia and Russia. In December 2016, OPEC and its oil-producing partners agreed to cut production by about 1.8 million barrels per day, or roughly 1.5% of global crude production at the time... The OPEC deal managed to stabilize oil prices around $50 per barrel, and last month the cuts were extended for another nine months. If it were still 1973, that might have caused a jump in oil prices. But in 2017, OPEC produces only about 40% of the global supply, and the US is among the top three producers in the world. The price of Brent crude spiked to $54.15 per barrel after the cuts were extended but has since dropped almost 12% and may continue to fall.

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iehi-feed-62392 Mon, 12 Jun 2017 22:39:35 GMT Is the Chain-Restaurant Recession Becoming Structural? http://implode-explode.com/viewnews/2017-06-12_IstheChainRestaurantRecessionBecomingStructural.html ... it looks more like the beginnings of a broader structural change. Brick-and-mortar retailers have been getting hammered by a structural change that will never reverse. Chain restaurants too may feel the pressure from a change in where, what, and how consumers eat and drink that will leave chain restaurants that cannot adjust to it by the wayside.

This comes on top of an economy where many potential patrons of chain restaurants simply don't have enough discretionary income after paying for all essentials -- with costs for healthcare and housing surging -- to prop up that industry.

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iehi-feed-62391 Mon, 12 Jun 2017 22:26:12 GMT Trump (Famous Advocate of Revenge) Tried To Get Qatar to Fund Him And Failed. Now He's Blockading Qatar, While Supporting Saudis http://implode-explode.com/viewnews/2017-06-12_TrumpFamousAdvocateofRevengeTriedToGetQatartoFundHimAndFailedNow.html iehi-feed-62380 Sun, 11 Jun 2017 16:14:12 GMT Trump's Economic Agenda Is Almost Dead http://implode-explode.com/viewnews/2017-06-11_TrumpsEconomicAgendaIsAlmostDead.html In February, I warned that President Donald Trump was repeating his predecessor's rookie mistakes. In March, I noted that the odds of passing important economic legislation had fallen meaningfully. This missive offers the most dire warning of all, with significant ramifications for equity markets.

Let's begin with the observation that the long-awaited "pivot towards being presidential" hasn't arrived, and by all indications never will. Those of us who harbored hopes for a comprehensive corporate tax reform, for repatriation of trillions of overseas dollars, for an infrastructure plan, and perhaps even for a lowered personal income tax rate, are coming to recognize the folly of our wishful thinking. That window of opportunity now looks like casements in South Florida during hurricane season.

We know Ritholtz doesn't want to say "I told you so" -- but we told you so. Trump was always just Trump; not even much of a businessman -- a performer and insult-comic who lucked into the presidency.

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iehi-feed-62372 Fri, 09 Jun 2017 22:46:20 GMT Rogers: The worst crash in our lifetime is coming in the next year http://implode-explode.com/viewnews/2017-06-09_RogersTheworstcrashinourlifetimeiscominginthenextyear.html iehi-feed-62371 Fri, 09 Jun 2017 21:02:24 GMT "Moby Trump" - Kunstler http://implode-explode.com/viewnews/2017-06-09_MobyTrumpKunstler.html iehi-feed-62370 Fri, 09 Jun 2017 16:27:51 GMT China's Gold Imports Seen Jumping 50% as Haven Demand Booms http://implode-explode.com/viewnews/2017-06-09_ChinasGoldImportsSeenJumping50asHavenDemandBooms.html Mainland China is set to import about 1,000 metric tons from the territory in 2017, said Haywood Cheung, president of the century-old exchange in Hong Kong which trades physical gold and silver. That compares with net purchases of 647 tons last year and would be the biggest since 2013, data from the Hong Kong Census and Statistics Department compiled by Bloomberg show.

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Demand is rising on concerns over property, share and bond markets and the outlook for the yuan, amid a government drive to reduce leverage in the financial system. Local consumption was up 15 percent in the first quarter, with sales of bars for investment climbing more than 60 percent and dwarfing a 1.4 percent rise in jewelry buying, according to data from the China Gold Association. China also imports gold from Switzerland.

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iehi-feed-62364 Thu, 08 Jun 2017 16:53:37 GMT Money Markets "Easing" Despite Impotent Fed Policy (BLOWUP IMMINENT?) http://implode-explode.com/viewnews/2017-06-08_MoneyMarketsEasingDespiteImpotentFedPolicyBLOWUPIMMINENT.html ZeroHedge reports this morning on some (more) interior confusion by economists at one of the big banks. The Fed has "raised rates" and yet according to their calculations, all their calculations, financial conditions are for them paradoxically easier.

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Through no action or direction of the Fed, the global "dollar" conditions after February 11, 2016, have been relatively better. The confusion more recently stems from the same set of flawed premises; it was widely believed that the tighter "dollar" conditions of the "rising dollar" period, though "unexpected", were due to the end of QE and then the first "rate hike." They weren't; the global "dollar" pays little or no mind to monetary policy.

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The world doesn't run on a small cadre of statisticians every six weeks or so fiddling with small changes to a money market rate that no one uses. You can appreciate why economists believe this, because they are those people. So long as they are, and so long as they keep tinkering with only the immaterial, the "dollar" is left to its own devices which has for a decade now meant only trouble. The past year or so hasn't even been "easing" so much as the space between the last eruption and the next one that markets are starting to sense as more than a sketchy possibility -- just like 2014 and the last time conditions were so "easy."

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