Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-62156 Thu, 27 Apr 2017 23:29:46 GMT Donald Trump used to hate Wall Street. Now he embraces it http://implode-explode.com/viewnews/2017-04-27_DonaldTrumpusedtohateWallStreetNowheembracesit.html The Wall Street influence is evident already in Trump's policy flip flops.

He's dialed back massively on the protectionist trade talk, especially on China. Trump campaigned on ripping up trade agreements like NAFTA and labeling China a currency manipulator (a fancy word for a cheater) on "Day One" in office. None of that happened.

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He's even started saying nice things about Janet Yellen, the head of the Federal Reserve, whom he blasted on the campaign trail for rigging the economy to make Obama look better.

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Trump relishes praise, and investors have cheered his pro-Wall Street shift by sending the stock market to record highs. It's been dubbed the "Trump rally." The Dow and S&P 500 have jumped over 10% since he won the election, a fact the president likes to tout on Twitter and in his speeches (it's even mentioned on the White House website).

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iehi-feed-62155 Thu, 27 Apr 2017 21:32:06 GMT If Mortgage Rates Tick Up Even a Little, What'll Happen to Canada's House Price Bubble? http://implode-explode.com/viewnews/2017-04-27_IfMortgageRatesTickUpEvenaLittleWhatllHappentoCanadasHousePriceB.html iehi-feed-62154 Thu, 27 Apr 2017 21:28:22 GMT Pending Home Sales Drop In March - Now Stagnant For 2 Years http://implode-explode.com/viewnews/2017-04-27_PendingHomeSalesDropInMarchNowStagnantFor2Years.html iehi-feed-62152 Thu, 27 Apr 2017 16:46:56 GMT Walmart pushes deeper into financial services http://implode-explode.com/viewnews/2017-04-27_Walmartpushesdeeperintofinancialservices.html iehi-feed-62151 Thu, 27 Apr 2017 16:18:38 GMT Why Trump should have ditched the mortgage-interest deduction http://implode-explode.com/viewnews/2017-04-27_WhyTrumpshouldhaveditchedthemortgageinterestdeduction.html While many Americans and lobbyists working on behalf of the real estate industry defend the mortgage-interest deduction, not too many people are taking it. Wealthy Americans are far more likely to benefit from the mortgage-interest deduction than others, in part because they're more likely to itemize their tax returns.

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Trump's plan calls for doubling the standard deduction to $12,400 for single individuals and $25,200 for married couples filing jointly, which consequently would raise the bar in terms of the amount homeowners need to pay in mortgage interest to qualify.

That makes it even more likely that wealthy Americans and those living in high-priced real estate markets will be the ones to benefit, said Svenja Gudell, chief economist at real estate website Zillow. "Before it was for the wealthy, now it's for the ultra-wealthy," Gudell said.

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iehi-feed-62150 Thu, 27 Apr 2017 15:05:05 GMT The U.S. Student Loan Implosion: By The Numbers http://implode-explode.com/viewnews/2017-04-27_TheUSStudentLoanImplosionByTheNumbers.html iehi-feed-62149 Thu, 27 Apr 2017 14:53:20 GMT Canada's Biggest Mortgage Lender Crashes; Gets Rescue -- End of Line For Housing Bubble? http://implode-explode.com/viewnews/2017-04-27_CanadasBiggestMortgageLenderCrashesGetsRescueEndofLineForHousing.html Today... the stock of Home Capital Group cratered by over 60%, its biggest drop on record, after the company disclosed that it struck an emergency liquidity arrangement for a C$2 billion ($1.5 billion) credit line to counter evaporating deposits at terms that will leave the alternative mortgage lender unable to meet financial targets, and worse, may leave it insolvent in very short notice.

As part of this inevitable outcome, one which presages the company's eventual disintegration and likely liquidation, Bloomberg reports that the non-binding rescue loan with an unnamed counterparty will be secured by a portfolio of mortgage loans originated by Home Trust, the Toronto-based firm said in a statement Wednesday. Home Capital shares dropped by 61% in Toronto to the lowest since 2003, dragging down other home lenders. Equitable Group Inc. fell 17 percent, Street Capital Group Inc. fell 13 percent, while First National Financial Corp. declined 7.6 percent. In short, the Canadian mortgage bubble has finally burst.

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iehi-feed-62148 Thu, 27 Apr 2017 14:43:57 GMT Fiscal FactCheck: How Much Will Trump's Tax Plan Cost? http://implode-explode.com/viewnews/2017-04-27_FiscalFactCheckHowMuchWillTrumpsTaxPlanCost.html iehi-feed-62146 Wed, 26 Apr 2017 19:58:52 GMT Trudeau's Reward for Courting Trump Is a Trade War on Lumber http://implode-explode.com/viewnews/2017-04-26_TrudeausRewardforCourtingTrumpIsaTradeWaronLumber.html iehi-feed-62144 Wed, 26 Apr 2017 14:57:12 GMT Trump to Stick to Proposed Standard Deduction Boost; 15% Corp and Pass-Thru Rate http://implode-explode.com/viewnews/2017-04-26_TrumptoSticktoProposedStandardDeductionBoost15CorpandPassThruRat.html President Trump on Wednesday plans to call for a significant increase in the standard deduction people can claim on their tax returns, potentially putting thousands of dollars each year into the pockets of tens of millions of Americans, according to two people briefed on the plan.

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Trump will call for a sharp reduction in the corporate tax rate, from 35 percent to 15 percent. He will also propose lowering the tax rate for millions of small businesses that now file their tax returns under the individual tax code, two people familiar with the plan said.

These companies, often referred to as "pass throughs" or S corporations, would be subject to the 15 percent rate proposed for corporations. Many pass throughs are small family-owned businesses, but they can also be large, such as parts of Trump's own real estate empire or law firms with partners who earn more than a million dollars annually. The White House is expected to pursue safeguards to ensure that companies like law firms can't take advantage of this new tax rate and allow their highly paid partners to pay much lower tax bills.

We can't say we wouldn't like these tax rates, though slim chance they get through Congress in one piece. And of they're done, they'll probably finally blow a fatal hole in U.S. finances, due to the deficit impact.

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iehi-feed-62143 Wed, 26 Apr 2017 04:45:34 GMT Wells Fargo's Fraud-Fostering Board Saved By "Uncle Warren" http://implode-explode.com/viewnews/2017-04-26_WellsFargosFraudFosteringBoardSavedByUncleWarren.html iehi-feed-62142 Tue, 25 Apr 2017 22:44:33 GMT Trump is caving on border wall funding after showing his base that he tried http://implode-explode.com/viewnews/2017-04-25_Trumpiscavingonborderwallfundingaftershowinghisbasethathetried.html Last night the president backed off his demand that any deal to fund the federal government include money to start construction on his border wall. At an event with conservative journalists, Trump said he's okay waiting until September to have this fight.

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Even after he realizes the border wall is infeasible, he is unlikely to ever acknowledge it publicly because it was such a central rationale of his candidacy. "I will build a great wall," Trump promised in his June 2015 announcement speech. "And nobody builds walls better than me, believe me. ... And I will make Mexico pay for that wall. Mark my words." (The Huffington Post created a timeline tracking his promises on the wall over the past two years.)

-- The president's aides have convinced him that he can present a little bit of money for border security, especially technology and more agents, as a victory. And he will avert a government shutdown that would have raised questions about his competence and basic leadership ability, especially with the GOP in total control of Washington. Trump has already begun taking credit for a drop in illegal border crossings and a reduction in crime along the border. He says his tough enforcement policies are deterring many from trying to enter the country.

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iehi-feed-62141 Tue, 25 Apr 2017 16:45:58 GMT Desperate "Naked selfie" Loans Proliferate on Chinese Platforms http://implode-explode.com/viewnews/2017-04-25_DesperateNakedselfieLoansProliferateonChinesePlatforms.html Interest on the "nude loans" reached an astonishing 30 percent a week, according to the Global Times newspaper. Lenders told female borrowers that if they failed to repay the loans, their nude photos would be sent to their families and friends, whose information was also required for some transactions, the article said.

Material in the file put on the web last Wednesday showed some borrowers also promised to repay loans with sexual favours, according to screen captures posted on social media websites.

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iehi-feed-62140 Tue, 25 Apr 2017 16:05:10 GMT The oil market has one big problem: People aren't buying enough gas http://implode-explode.com/viewnews/2017-04-25_TheoilmarkethasonebigproblemPeoplearentbuyingenoughgas.html iehi-feed-62137 Tue, 25 Apr 2017 01:51:44 GMT Wells Fargo Boardroom Showdown Looms, Pitting Ever-Smug Buffett vs. Public Pension Funds http://implode-explode.com/viewnews/2017-04-24_WellsFargoBoardroomShowdownLoomsPittingEverSmugBuffettvsPublicPe.html Giant pension funds -- like Calpers, which manages the retirement funds of California's public employees, and its New York City counterpart -- are planning to vote against most of Wells's 15 board members, saying they failed in their duties to oversee the company.

The bank does have one influential ally: Warren Buffett, whose firm, Berkshire Hathaway, owns about 10 percent of the company's shares. He has signaled that he intends to back the incumbent board, and his support could ultimately carry more weight than that of investors like pension funds, which tend to be more vocal in their criticism.

As of late Monday, a few large shareholders were leaning toward voting against some board members. (Two people joined the board in February, after the scandal had been widely exposed.)

"If there is a serious failure in oversight, directors need to be held accountable," said Scott M. Stringer, the New York City comptroller. He helps oversee the city's pension funds, which are planning to vote against nine of the bank's 15 directors.''

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The vote is not only a serious challenge for Wells, one of the nation's largest banks. It is also a test for a decades-long movement among certain shareholders who have been pushing to hold corporate leaders more accountable.

"If we're serious about board accountability in this country, it's hard to understand the case for keeping these directors," said Robert J. Jackson, a professor at Columbia Law School and the director of the school's program on corporate law and policy.

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Yet for all the scandals that have rattled corporate America over the past decade -- such as those in the mortgage market and the media industry -- it is extremely rare for a board to take the fall.

In related news, the Fed and the FDIC have approved Wells' "living will" plans.

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iehi-feed-62136 Tue, 25 Apr 2017 00:32:18 GMT Miami Is Spelling Doom for the Real Estate Market http://implode-explode.com/viewnews/2017-04-24_MiamiIsSpellingDoomfortheRealEstateMarket.html ... more than 11,000 new condos [are] scheduled to hit Miami's market by 2018. That's about 70% more condo units than Miami already has. This is going to be like pouring jet fuel on a raging fire. And yet speculators continue to "flip" condos across the city.''

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It's happening all across Florida, Las Vegas, and Atlanta. It's also happening in small U.S. cities like Fresno, California and Tacoma, Washington.

According to real estate site Trulia, more than 6% of home sales last year were "flips." These are properties that have sold at least twice in the past years.

That's up 5.3% from a year ago. More importantly, we're now seeing the highest level of flipping activity since 2006...which was the peak of the last housing bubble. This is a big deal. It tells us that the U.S. housing market is likely in the late stages of a bull market.

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iehi-feed-62135 Mon, 24 Apr 2017 23:22:57 GMT What of Suburban Real Estate With Millennials Favoring Cities? http://implode-explode.com/viewnews/2017-04-24_WhatofSuburbanRealEstateWithMillennialsFavoringCities.html ... if Millennials aren't earning enough to buy pricey homes, who is going to buy the tens of millions of houses Baby Boomers will be selling as they downsize/move to assisted living? As for inheriting Mom and Dad's house--that's not likely if Mom or Dad need the cash to fund their retirement/assisted living.

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Anecdotally, I can't think of a single individual in their 20s or 30s that I know personally who has bought a house in a distant suburb. Everyone in this age group has bought a house in an urban zone. Not a highrise condo in the city center, but a house in a ring city near public transport.

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iehi-feed-62134 Mon, 24 Apr 2017 21:08:58 GMT Mayor to subsidise 'naked' homes solution to London housing crisis http://implode-explode.com/viewnews/2017-04-24_MayortosubsidisenakedhomessolutiontoLondonhousingcrisis.html ... the Enfield homes would be about 15% cheaper to build than standard new homes because of their basic design.

"They will have a functioning sink and bathroom, but what they won't have is every interior wall or things like fitted coffee machines [which housebuilders often include]," he said.

Costs will be cut further because buyers will not have to pay for the land in the purchase price. The freehold will be retained by the council and owners will pay annual ground rent.

The plan is to ensure that the homes are cheap enough that buyers will only need to spend a third of their gross income on mortgage payments -- a widely used definition of "genuinely affordable" housing. Subject to planning consent, the apartments could be ready for occupation in 2020.

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The austere designs fit with a trend for minimal living among millennials forced upon them in part by a lack of disposable income because of high rents and property prices.

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iehi-feed-62133 Mon, 24 Apr 2017 19:37:31 GMT "Fear City" Explores U.S. Instance of "Shock Doctrine" -- And Trump's Connection To It http://implode-explode.com/viewnews/2017-04-24_FearCityExploresUSInstanceofShockDoctrineAndTrumpsConnectionToIt.html New York's debt crisis is an incredibly important and little understood chapter in the evolution of what Nobel Prize-winning economist Joseph Stiglitz calls market fundamentalism, a process the Trump administration is in the process of rapidly accelerating, which is why I was so happy to receive Kim Phillips-Fein's remarkable new book, "Fear City." In it, she meticulously documents how the remaking of New York City in the '70s was a prelude to what would become a global ideological tidal wave, one that has left the world brutally divided between the 1 percent and the rest. She helps us to understand many of the forces that Trump exploited to win the White House, from economic insecurity to crumbling public infrastructure to fearmongering about black crime, all amid previously unimaginable private wealth.

But one of the things that really stood out for me in the book is what it reveals about Trump himself. "Fear City" tells the story of how a brash 29-year-old real estate developer seized on the city's misfortune to boost his own fortune, extracting predatory terms from a community in crisis.

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iehi-feed-62132 Mon, 24 Apr 2017 16:00:11 GMT Euro and shares rally after Emmanuel Macron wins first voting round of French election http://implode-explode.com/viewnews/2017-04-24_EuroandsharesrallyafterEmmanuelMacronwinsfirstvotingroundofFrenc.html "Macron will be reassuring to markets, with his pledge to lower corporate taxes and to lighten the administrative burden on firms. He basically represents continuity," said Octavio Marenzi, CEO of Opimas, a capital markets management consultancy.

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According to the latest polling of voters' intentions in the second round, Mr Macron is forecast to beat Ms Le Pen by 62 per cent to 38 per cent, with many political figures quick to join the 'anyone but Le Pen camp'.

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