Implode-Explode Heavy Industries news feed Tracking the many faces of the global credit implosion. en-us iehi-feed-60513 Wed, 24 Aug 2016 00:58:22 GMT U.S. new-home sales climb to best level since late 2007 New-home sales jumped 12.4 percent last month to a seasonally adjusted rate of 654,000 annual units, the strongest level since October 2007, the Commerce Department said Tuesday. The demand has eclipsed the pace of construction. Just 4.3 months' supply of new homes is available on the market, down from 5.2 months a year ago.


The improved sales of both new and existing homes has supported the broader U.S. economy, which is still hampered by a global slowdown and weak worker productivity. Existing-home sales reached a seasonally adjusted annual rate of 5.57 million in June, the best performance since early 2007.

Happy times are hear again! Or, maybe, it's pretty much a peak...

iehi-feed-60510 Tue, 23 Aug 2016 21:44:18 GMT Mylan Execs Gave Themselves Raises As They Hiked EpiPen Price; Sparking Congressional Ire iehi-feed-60509 Tue, 23 Aug 2016 21:41:56 GMT Rent at Trump Tower Surged After Donald Trump Stopped Self-Funding His Campaign In March, when Trump was still paying for his presidential run mostly out of his own pocket, his campaign spent $35,458 to rent its headquarters in Trump Tower. Last month, however, that figure surged to $169,758, even as the number of paid campaign employees and staff dropped from 197 to 172 over the same period, the Huffington Post reports. The sharp increase in campaign spending appears to correspond to a large infusion in cash from outside donors. According to the Huffington Post, the amount Trump Tower has charged the campaign for rent has steadily increased since May, the same month that Trump clinched the nomination and inked a deal with the Republican National Committee to fund his campaign. At the end of May the campaign doled out $72,800, followed by $110,684 in June, and $169,758 in July.

Trump Tower isn't the only Trump property to have benefited. Over the same period, the Huffington Post reports a number of Trump's namesake golf courses and restaurants have earned a total of $260,000, citing F.E.C. records. In July alone, the campaign spent $495,000 on Trump's air travel, which is operated by a company that he owns. The Washington Post estimated that the Trump clan has pocketed $7.7 million as a result of the campaign's expenditures.

Who is surprised? Once a con artist, always a con artist...

iehi-feed-60508 Tue, 23 Aug 2016 21:27:12 GMT U.S. banks want to cut branches, but customers keep coming They have reduced the number of tellers and moved them to the back. Their ATMs can perform more sophisticated tasks and banks have developed nifty mobile apps for routine banking needs. They are even experimenting with digital loan underwriting.

Yet customers still expect contact with bank staff and JPMorgan recently had to hire more tellers after customer complaints.

The reason is, unlike in the rest of the advanced world, online/electronic banking in the U.S. is a pain in the ass and hobbled by bank laziness and regulatory limitations. Everyone in the U.S. should have had the ability to send e-checks (or scan actual checks for deposit themselves) years ago -- and it should have been effectively instant. But when you can bet no payment will clear in less than 2-3 days, you have to schlep down the the bank to do cash transactions far more often. Then there's the fact that people have to regularly talk to a banker to complain about nickle-and-diming fees being applied when they shouldn't have (or when they should have, but this was never properly explained or disclosed to the customer)....

iehi-feed-60502 Mon, 22 Aug 2016 21:28:17 GMT Revealed: ECB Secretly Hands Cash to Select Corporations Now it has been revealed by The Wall Street Journal that the ECB has also secretly been buying bonds directly from companies, thus handing them directly its freshly printed money.

It has been doing so via "private placements." These debt sales are not open to the broader market. There's no need for a prospectus. Only a small number of institutional investors participate. It allows companies to raise cash quickly, without jumping through the normal hoops. Private placements are not unusual. What's new is that the ECB used them to buy bonds...

According to Apostolos Gkoutzinis, head of European capital markets at law firm Shearman & Sterling, cited by The Wall Street Journal: because there is no prospectus or the other formalities required in a normal bond offering, "there won't be any transparency, there won't be a press release. It's all done discreetly."


Now, the race is on for eligible companies to wet their beaks in this new, much more discreet free-money fountain, while so-called "investors" scramble to divine what the biggest fish in the pond is about to buy next. If they're lucky they may even get a heads-up straight from the horse's mouth.The ECB's favorite banks will also get juicy fees underwriting the deals. The Journal reported that Credit Suisse has already "reshuffled its coverage of national central banks" in an attempt to tap into the new market.

...According to The Journal, Citigroup figured "that bonds eligible for ECB purchases have already outperformed ineligible bonds by roughly 30% since the bond-buying program was announced in March."

It's Financial Darwinism writ on a heretofore unimaginable scale. Thanks to ECB intervention, Europe's biggest companies with the strongest finances -- including some that are majority state-owned such as French energy giant EDF -- are gaining access to funds (many of them public) quicker, more easily, and at cheaper rates than anyone else in the market. From now on, they may even get the money in secret.

So... isn't the ECB now potentially tripping WTO anti-subsidy prohibitions?

iehi-feed-60498 Mon, 22 Aug 2016 16:03:03 GMT Stephanie Pomboy: A Grim Outlook for the Economy, Stocks What ignited and supported the entire era of globalization was the spendthrift U.S. consumer; economies have been totally reliant on trade to U.S. consumers. This once-in-a-generation asset deflation will fundamentally change behavior, just as the Depression changed an entire generation's attitude about spending and saving.

Obviously, the burden of proof is on me, because for 20 years the consumer has reliably borrowed from China to buy their tube socks. Post-crisis, the consumer has clearly pulled back. How many months did we have disappointing retail sales numbers that no one could explain? They'd say it's too hot, too cold, there's Brexit. But what's really causing this slowdown in spending is that the post-crisis consumer is determined to save, and do it the old-fashioned way. Historically, when rates go down, people save less. In this cycle, things have completely reversed. Over the same stretch of time that the two-year note has gone from 4% to 1%, the savings rate has doubled. There are mountains of evidence to support my thesis. But every Wall Street analyst and the Fed is using the pre-crisis analytical framework to look at an economy that is fundamentally challenged.


Q: Where, when, and how will helicopter money begin?

Japan is the most natural place for it to start, but Japan isn't dramatically different from the U.S., the U.K., or Europe. We're all dealing with an aging population. This is another great flaw in the logic of monetary-policy makers. They've pushed rates to and below zero in an effort to boost growth. But they did so against a population that is aging and needs more than ever to get returns on what they've set aside. By lowering rates, they've actually intensified the saving urge.

The statistics bear this out. Over the last four years, U.S. nominal GDP growth has gone from 4.3% to 4.1% to 3% to 2.4%. The deflator, the inflation we are supposed to be targeting, went from 1.9% to 1.6% to 1.5% to 1.1%. What greater proof do you need that lower rates aren't helping and, to the contrary, are making things worse? Growth and inflation are slowing, and it has to do with this aging demographic. Add the emotional and financial scares from the housing-bubble bust, and policy makers have really got it ass-backwards. They're taxing the economy, not stimulating it.


Q: Is it possible that you're too negative? Stocks are hitting new highs and recent economic data seem reasonably sturdy.

The July payroll number was a barnburner on the upside. But that report is the exception. Jobless claims, the NFIB small business survey, the employment component of both the ISM manufacturing and nonmanufacturing surveys--they all suggest things are rolling over [getting worse]. Importantly, the No. 1 input into hiring--corporate profits--has posted five consecutive quarterly declines, which suggest employment growth will follow. Employment is going to look a lot softer over the next six months.


Q: So what are you positive about?

Because economic growth won't be a catalyst to push rates higher, I continue to like government bonds. Look for a re-pricing of credit risk with the spreads between investment-grade and junk bonds widening out. We'll also have a renewal of QE in the U.S. and are seeing it elsewhere. And as Fed tightening goes out the window and the dollar sells off, we'll have another meaningful leg up in gold.

iehi-feed-60497 Mon, 22 Aug 2016 15:56:22 GMT Japan Inc unenthused over Abe's stimulus, BOJ easing (WHICH MEANS IT HAS ALREADY FAILED!!) Prime Minister Shinzo Abe this month unveiled a 13.5 trillion yen (£102.6 billion) fiscal package of public works projects and other measures, vowing a united front with the BOJ to revive the economy and raising speculation of a surge in government spending essentially financed by the central bank.

But less than 5 percent of companies believe the steps will boost the economy near-term or raise its growth potential, according to the Reuters Corporate Survey, conducted August 1-16.

"It's disappointing that the stimulus focuses on public works, and it lacks attention to promoting industry and technology that would lead to future growth," said a manager at a precision-machinery maker.

iehi-feed-60495 Sun, 21 Aug 2016 16:49:20 GMT The Fed Launches A Facebook Page... And The Result Is Not What It Had Expected 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 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...

iehi-feed-60492 Sun, 21 Aug 2016 13:38:32 GMT Canadian Debt Slaves Pile it on iehi-feed-60491 Sun, 21 Aug 2016 13:36:27 GMT Schrute Bucks? Real Median Household Income Hasn't Grown Since 2000 (Actually 1999) iehi-feed-60490 Sun, 21 Aug 2016 12:52:40 GMT Amway Heirs AKA The DeVos Family Members Busted In Tax Scam Dragnet iehi-feed-60488 Sat, 20 Aug 2016 16:50:41 GMT Brexit Armageddon was a terrifying vision -- but it simply hasn't happened It was hard to avoid the doom and gloom, not just in the weeks leading up to the referendum, but in those immediately after it. Many of those who voted remain comforted themselves with the certain knowledge that those who had voted for Brexit would suffer a bad case of buyer's remorse.

It hasn't worked out that way. The 1.4% jump in retail sales in July showed that consumers have not stopped spending, and seem to be more influenced by the weather than they are by fear of the consequences of what happened on 23 June. Retailers are licking their lips in anticipation of an Olympics feelgood factor.


The financial markets are serene. Share prices are close to a record high, and fears that companies would find it difficult and expensive to borrow have proved wide of the mark...

Some caveats are in order. It is still early days. Hard data is scant. Survey evidence is still consistent with a slowdown in the economy in the second half of 2016. Brexit may be a slow burn, with the impact only becoming apparent in the months and years to come.

But it is obvious that the sky has not fallen in as a result of the referendum, and those who said it would look a bit silly. By now, Britain was supposed to be reeling from the emergency budget George Osborne said would be necessary to fill a £30bn black hole in the public finances caused by a plunging economy. The emergency budget is history, as is Osborne.

iehi-feed-60485 Fri, 19 Aug 2016 21:35:17 GMT American Women Are Still Dying in Childbirth at Alarming Rates ``In dramatic contrast to the rest of the developed world, the rate of women dying because of complications with pregnancy or childbirth rose in the United States by 27 percent between 2000 and 2014. During the same time period, according to a study that will be published in the September issue of Obstetrics and Gynecology, 157 other countries reported a decrease in their maternal mortality rates.


The nationwide rates are troubling, but Texas, whose maternal mortality rate doubled over two years, is the state with the sharpest increase. From 2006 to 2010, the maternal mortality rate stayed relatively steady in the state, at about 18 deaths per 100,000 live births.


The "changes in the provision of women's health services" in Texas began in September 2011, when the state's family planning budget was cut by two-thirds. Programs that provided prenatal care for low-income women were deeply affected, and the move also excluded clinics that provide abortion services from the funding. And in 2013, Texas passed HB 2, an anti-abortion omnibus bill that set off a domino effect of restrictions that drained half the state's clinics of resources, ultimately shuttering them.

iehi-feed-60484 Fri, 19 Aug 2016 21:33:29 GMT Greek Villagers Rescued Migrants. Now They Are the Ones Suffering. Today the migrants have mostly stopped coming. The coastline, once littered with orange life vests and wrecked boats, has been cleaned to a near-spotless white. But the human drama has left an imprint here, and across all of Lesbos, in ways that have only begun to play out.

The village is nearly empty of tourists this year as Germans, Swedes and other visitors who had long flocked to the crystalline waters of Lesbos go elsewhere, wary of spending their vacations in a place now associated with human desperation.


"The whole village is proud of what we did," said Theano Laoumis, who helps run the To Kyma taverna. On the taverna's beach, refugee dinghies had landed in an unceasing stream. "You didn't know who to save first, there were so many people. But we did save them. It was only natural. That should bring good publicity, not bad."

The drop in business has hit Lesbos as Greece has struggled to emerge from a lengthy economic crisis. Some are bitter that the refugee tide has added to their woes.

iehi-feed-60483 Fri, 19 Aug 2016 19:24:57 GMT Australia Blocks Power Grid Sale To China; Opening Rift Between Countries 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.


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.

iehi-feed-60482 Fri, 19 Aug 2016 19:21:55 GMT Jimmy Carter: The U.S. Is an "Oligarchy With Unlimited Political Bribery" iehi-feed-60481 Fri, 19 Aug 2016 19:20:31 GMT Housing: China's Fading Animal Spirits "In the past, the economic players expanded supply first and created jobs so as to create demand, but that is gone now," Lo said in a telephone interview after Friday's disappointing data. "It has to clean out the excess capacity, which means the supply-expansion model has to change."

Another way of putting it: China's build-it-and-they-will-come strategy needs to shift to one where demand, not supply, is in the drivers' seat. It's a change companies are struggling to come to terms with, leaving private investment in the doldrums.

iehi-feed-60480 Fri, 19 Aug 2016 19:18:58 GMT States fear new era of deficits (AS ECONOMY SPUTTERS) iehi-feed-60478 Fri, 19 Aug 2016 14:25:25 GMT A Commodities Rebound Is Accelerating in China's Neighborhood 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. 


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.