Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-61258 Wed, 07 Dec 2016 03:30:43 GMT Islamic finance set to change gold market http://implode-explode.com/viewnews/2016-12-06_Islamicfinancesettochangegoldmarket.html We don't have the full details of the guidelines but expect to find out more this week at the World Islamic Banking Conference. However, we do know three things that the new Shariah gold-standard will achieve: first, it will increase both the number and diversity of available Shariah-compliant gold investment products; second, it will place far greater emphasis on the role of physical gold in gold transactions; finally, it will give a greater role to Islamic finance in the setting of the gold price...

If Islamic Finance institutions were to allocate just one per cent of assets into new gold products then we would expect to see demand climb by about 500-1000 tonnes, per annum. Given that recent demand and supply figures showed a surplus of just 172 tonnes of gold in the market, we could begin to see some tightening with the increase of Shariah-compliant gold instruments, which will have a positive impact on the price.

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iehi-feed-61257 Wed, 07 Dec 2016 03:16:11 GMT Donald Trump says he wants to fix cities. Ben Carson will make them worse. http://implode-explode.com/viewnews/2016-12-06_DonaldTrumpsayshewantstofixcitiesBenCarsonwillmakethemworse.html Trump's selection of Carson echoes Ronald Reagan's selection of Samuel Pierce as his HUD secretary. Like Trump, Reagan had lashed out against inner cities and pledged to slash social spending. Like Trump's supporters, the majority of Reagan's voters did not live in cities. And like Trump, he had little support among African Americans. But like Trump, Reagan wanted a black face in a high place for a little legitimacy in a post-civil-rights-movement White House. And, like Trump, Reagan pledged to loosen housing and financial regulations.

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HUD's privatization opened up new possibilities for crony capitalism. HUD staffers channeled money to Republican-connected lawyers, consulting firms and developers. One of the dozens swept up in the investigation was Trump's former campaign manager, Paul Manafort, who successfully lobbied for about $43 million in federal subsidies for a shabby New Jersey housing complex, a place described as "a shamble of cinder blocks long past the point of repair." He received $326,000 in fees for his efforts and eventually owned a 20 percent share of the development, which showed few signs of improvement after winning the HUD grant. Eventually, 16 HUD staffers and external consultants were convicted. (Manafort was never charged with wrongdoing.)

History never repeats itself exactly, but Pierce's time at HUD offers some warnings for Carson's nomination. Like Pierce, Carson is shaping up to be a token black Cabinet member. Trump has not appointed any other black officials so far, and given his lack of high-profile black supporters, he doesn't have many prospects. Like his predecessor, Carson has little management experience. And like Pierce, he will oversee an agency whose budget includes substantial contracts with politically connected nonprofits, real estate developers, and mortgage lenders. The possibilities for corruption are legion with a HUD secretary who knows nothing about the agency, its programs and its vastly complex budget.

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HUD turned 50 last year. Metropolitan America has changed a lot in the half-century since Johnson created the agency. But cities' problems are no less pressing, even if Trump left them unaddressed on the campaign trial as he railed about crime. In most urban areas, economic and racial inequality has spiked. Urban housing is a case study in market failure: too much for the rich and, in many cities, for international speculators. Affordable, high-quality housing is scarce, especially in rapidly gentrifying cities such as New York, Washington and Los Angeles. Even poorer cities such as Detroit, Philadelphia, St. Louis and Milwaukee have huge waiting lists for subsidized housing units. Poverty has risen sharply in the suburbs. Many of the poorest Americans, urban or suburban, are left to the vagaries of a predatory rental market. Few working-class and poor people can afford to live in job-rich suburbs and exurbs or send their children to the best-funded school districts. And many municipalities are struggling with collapsing tax bases, decaying infrastructure, and aging housing.

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iehi-feed-61255 Tue, 06 Dec 2016 23:47:54 GMT Italian Bank Shares Slump as Renzi Loss Adds to Uncertainty http://implode-explode.com/viewnews/2016-12-06_ItalianBankSharesSlumpasRenziLossAddstoUncertainty.html UniCredit Group AG and Banca Monte dei Paschi di Siena SpA fell along with most Italian bank shares after Prime Minister Matteo Renzi's decision to resign added to uncertainty about their plans for shoring up their finances. Monte Paschi will decide within the next few days whether it will proceed with a planned capital increase, people with knowledge of the matter said.

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Monte Paschi is seeking as much as 5 billion euros by the end of the year to repair its buffers after selling 28 billion euros in bad loans at a loss. While the bank has persuaded investors to swap more than 1 billion euros of subordinated notes for shares, it has yet to announce a large-scale investor and any agreement with the banks that would underwrite a planned public share sale.

"The chances of a successful implementation of the capital plan within the original timeframe (before the end of the year) are slim," BNP Paribas analysts Geoffroy de Pellegars and Miguel Hernandez said on Monday. If the European Central Bank decides Monte Paschi needs to be recapitalized immediately, it could face a government-backed rescue that would impose losses on bondholders, they said. "The near-term outcome depends entirely on the ECB," according to the analysts.

See also Sources: Monte Paschi has apparently already requested a bailout.

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iehi-feed-61254 Tue, 06 Dec 2016 23:44:22 GMT Matteo Renzi's resignation temporarily 'frozen' by Italian president http://implode-explode.com/viewnews/2016-12-06_MatteoRenzisresignationtemporarilyfrozenbyItalianpresident.html Renzi met Sergio Mattarella on Monday at the presidential palace -- the Quirinale -- in order to formally submit his resignation following a stunning defeat in a referendum on Sunday. Renzi was expected to step down immediately but his departure could now be delayed until Christmas.

Mattarella signalled that he will not call snap elections in response to the referendum results, putting him on a collision course with populist and rightwing parties that want a new poll to be called right away.

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iehi-feed-61253 Tue, 06 Dec 2016 23:40:22 GMT Carrier Boss Suggests Consequence of Deal With Trump Will Be: More Robots http://implode-explode.com/viewnews/2016-12-06_CarrierBossSuggestsConsequenceofDealWithTrumpWillBeMoreRobots.html iehi-feed-61252 Tue, 06 Dec 2016 23:33:32 GMT The Deepening Deep State - KUNSTLER http://implode-explode.com/viewnews/2016-12-06_TheDeepeningDeepStateKUNSTLER.html A little paranoia about the growing fascist behavior of the US government is a useful corrective to trends that citizens ought to be concerned about -- for instance, the militarization of police; the outrageous "civil forfeiture" scam that allows police to steal citizens cash and property without any due process of law; the preferential application of law as seen in the handling of the Clinton Foundation activities and the misconduct of banking executives; the attempt to impose a "cashless society" that would herd all citizens into a financial surveillance hub and eliminate their economic liberty.

These matters are especially crucial as the nation stumbles into the next financial crisis and the Deep State becomes desperate to harvest every nickel it can to rescue itself plus the cast of "systemically important" (Too-Big-To-Fail) banks and related institutions like Fannie Mae and Freddie Mac, which are about to once again be left holding colossal bags of worthless non-performing mortgages, not to mention the pension funds and insurance companies that will also founder in the Great Unwind that is likely to commence as Trump hangs his golden logo over the White House portico.

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iehi-feed-61251 Tue, 06 Dec 2016 23:24:24 GMT Wells Fargo to Abused Customers: See You in Arbitration http://implode-explode.com/viewnews/2016-12-06_WellsFargotoAbusedCustomersSeeYouinArbitration.html On Nov. 23, the dishonored bank filed a motion to force its victims to stick to their word and honor the contract requiring arbitration. In Wells' world, playing by the rules is apparently only expected of the customer. Wells spokesman Jack Grone said the company declined to comment. If it wins, Wells will corral its victims into hearings before the American Arbitration Association, the forum it specified in its customer agreements.

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Financial companies and their lobbyists spend a lot of time talking about what a terrific, fair system arbitration is for the public. I'd love to have the chance to sit through some of those hearings and report back to you on how fair or unfair it might be. But reporters are not welcome.

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iehi-feed-61250 Tue, 06 Dec 2016 17:22:10 GMT Bigger trade deficit suggests trade will drag on growth http://implode-explode.com/viewnews/2016-12-06_Biggertradedeficitsuggeststradewilldragongrowth.html iehi-feed-61249 Tue, 06 Dec 2016 17:19:37 GMT Poll: Trump's Carrier deal is wildly popular http://implode-explode.com/viewnews/2016-12-06_PollTrumpsCarrierdealiswildlypopular.html iehi-feed-61248 Tue, 06 Dec 2016 17:15:15 GMT House G.O.P. Signals Break With Trump Over Tariff Threat http://implode-explode.com/viewnews/2016-12-06_HouseGOPSignalsBreakWithTrumpOverTariffThreat.html "I respect President-elect Trump for fulfilling his campaign promise to withdraw from TPP," Representative Kevin Brady, Republican of Texas and chairman of the powerful House Ways and Means Committee, said shortly after the election. "We can't abandon these markets to China and other competitors because American businesses and customers will lose out," he added.

... But massive tariffs appear too much to abide. Both Mr. Ryan and Senator Mitch McConnell, Republican of Kentucky and the majority leader, supported a bill that gave Mr. Obama and his successor special "fast track" authority to negotiate trade agreements, and are proponents of reducing tariff barriers.

"Tax cuts and deregulation will make the American economy great again, but tariffs and trade wars will make it tank again," said David McIntosh, president of the conservative group Club for Growth in a statement, adding, "The majority leader is right to caution against protectionism and to urge a robust debate on free markets and trade."

House leaders want to tackle the problem of companies moving operations overseas with a broad rewriting of the corporate tax code, which they say will make American manufacturing more competitive without resorting to punitive measures on individual companies.

"Tough talk plays well with his base and is arguably even long overdue," said Brian Walsh, a Republican consultant and former official at the National Republican Senatorial Committee. "But ultimately the legislative focus will be on tax reform and deregulation versus tariffs and trade wars. I don't believe Republicans will let a golden opportunity to finally pass comprehensive tax reform to fall victim to intraparty squabbling."

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iehi-feed-61247 Tue, 06 Dec 2016 17:13:47 GMT Donald Trump's Twitter Tirade Sparks Anger in China http://implode-explode.com/viewnews/2016-12-06_DonaldTrumpsTwitterTiradeSparksAngerinChina.html Mr. Trump's call with Ms. Tsai and subsequent tweets accusing China of currency manipulation, over-taxing U.S. imports and building "a massive military complex in the middle of the South China Sea" have generated a "tremendous amount of uncertainty" in Beijing, said David Dollar, the Treasury Department's economic and financial emissary to China during Mr. Obama's first term.

"Some of the issues with China are best settled quietly and confidentially," Mr. Dollar said. "If the whole policy is diplomacy-by-tweet, it's hard to think that's going to meet U.S. objectives."

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Stephen Yates, a former national security adviser to Vice President Dick Cheney who worked as a Mormon missionary in Taiwan, said that for at least a week Ms. Tsai's name was on Mr. Trump's list of foreign leaders whom he would speak with by phone.

"To my knowledge, Taiwan was on that list early, and it took some time to arrange," said Mr. Yates, who is seen as a candidate for a post on Mr. Trump's national security team. "It was a message in the sense that Donald Trump is not necessarily going to be told what he can or can't do because a foreign leader says so. That's exactly the kind of thing that millions of Americans detest about Washington," said Mr. Yates, who currently is visiting Taiwan for meetings with senior officials.

"If it's going to cause some pain, then so be it," he said.

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Mr. Trump used Twitter on Sunday to complain that China "heavily" taxes U.S. products entering their country, but that the U.S. doesn't tax Chinese imports. China does impose a tariff, a sort of import tax, ranging between 5% and 9.7%, on many products.

The U.S. in many cases charges a tariff on imports from China and many other countries, ranging between 2.5% and 2.9%. Mr. Trump has in the past floated the idea of imposing a tariff against China more than ten times larger.

While Mr. Trump has appeared to soften some of his other campaign stances, on issues such as climate change and torture of terrorism suspects, he has not backed off his calls to more aggressively challenge Beijing.

His approach in recent days "could force the Chinese to feel they have to respond," said Michael Auslin, a resident scholar in Asian Studies at the American Enterprise Institute. Mr. Auslin said China could decide to take any number of steps, including putting "another 1,000 missiles across the [Taiwan] strait." It also

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iehi-feed-61245 Tue, 06 Dec 2016 01:22:55 GMT Carney Lays Out Vision to Revive Benefits of Globalization http://implode-explode.com/viewnews/2016-12-05_CarneyLaysOutVisiontoReviveBenefitsofGlobalization.html Mark Carney launched a defense of globalization and set out a manifesto for central bankers and governments to boost growth and make the world economy more equal.

The Bank of England Governor said they must acknowledge that gains from trade and technology haven't been felt by all, improve the balance of monetary and fiscal policy, and move to a more inclusive model where "everyone has a stake in globalization."

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Carney also defended the central bank's current policy stance... "Low rates are not the caprice of central bankers, but rather the consequence of powerful global forces, including debt, demographics and distribution," he said, adding that they helped to prevent a deeper economic downturn.

So he wants to make the "fruits of globalization felt more equally", but wants to ignore the chief driver of the inequality... this pretty much sums of the establishment's "response" to the undeniable popular revolt going on now.

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iehi-feed-61244 Tue, 06 Dec 2016 01:04:30 GMT Dallas Mayor Sues to Stop Public Pension "Run On The Bank" http://implode-explode.com/viewnews/2016-12-05_DallasMayorSuestoStopPublicPensionRunOnTheBank.html The police and firefighters of Dallas have pulled more than $500 million out of their retirement savings plan since early August, worried that their pension fund could soon run out of money. Now, Dallas Mayor Mike Rawlings is suing to stop them.

The Dallas mayor said he is acting in his private capacity as a Dallas taxpayer and paying for the suit himself. In a Monday court filing, Mr. Rawlings asks a Dallas County judge for a restraining order that temporarily halts withdrawals from the Dallas Police and Fire Pension Fund.

The revolt by members of the $2.27 billion fund heightens the risk that a major U.S. pension fund could run out of money. It also offers an extreme case of what can happen when a pension wagers on lucrative returns to cover funding shortfalls.

Many pension funds took on more risk in recent years to fill mounting funding gaps, hurt in part by declining bond yields that damped returns. Between 2007 and 2015, the average percentage of assets large pension plans parked in alternative investments or real estate grew to 17.6% from 10.1%, according to the Wilshire Trust Universe Comparison Service.

But Dallas is in a class by itself. The withdrawals since August represent an 18% drop in the fund's total assets, seriously reducing the fund's ability to earn money through investment.

"This particular circumstance is more akin to runs on the bank that you saw at the beginning of the Depression because people were afraid they weren't going to get their money," said Robert Klausner, an attorney who represents public pension funds.

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Officers say they are pulling their retirement savings because of concerns about the fund's finances. A series of aggressive real estate bets from Hawaii to Paris and a conflict over the value of those properties triggered more than $500 million in losses, leaving the fund with enough to pay just 45% of future benefits. Officials are warning the pension could go broke by 2027.

Dallas adopted its more aggressive strategy before the crisis, adding luxury homes and shopping centers in Hawaii, student housing in Texas, and raw land in Idaho and Colorado, records show.

The strategy appeared to be working, with Dallas returns often beating national medians. But that success received scrutiny in 2013 when the Dallas Morning News reported that many properties hadn't been appraised for years. Instead, certain holdings were valued based on their purchase price and in some cases by also adding development and operating expenses, said Chief Financial Officer Summer Loveland, who joined the fund in November 2013.

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iehi-feed-61241 Mon, 05 Dec 2016 22:43:03 GMT A pensions time bomb spells disaster for the US economy http://implode-explode.com/viewnews/2016-12-05_ApensionstimebombspellsdisasterfortheUSeconomy.html With so few people privy to what little recovery we've had and given how stretched pensions are, checks are going to have to be written from Washington sooner than you think, DiMartino Booth told Real Vision TV in an interview.

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"The average state pension in the last fiscal year returned something south of 1%. You cannot fill that gap with a bulldozer, impossible," DiMartino Booth said. "Anyone who knows their compounding tables knows you don't make that up. You don't get that back unless you get some miracle."

The last time we saw significant market weakness, the baby boomers pretty much accepted that they would be retiring at 70 instead of 65, she added. "Well, guess what? They're turning 71. And the physiological decision to stay in the workforce won't work for much longer. And that means that these pensions are going to come under tremendous amounts of pressure.

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Huge withdrawals are now taking place, amid concerns over the future viability of the pension scheme, which commentators say could be flat broke in a little over ten years. "We're seeing this surge of people trying to retire early and take the money. Because they see it's not going to be there. And if that dynamic and that belief spreads-- forget all the other problems," DiMartino Booth said. "The pension fund -- underfunding is Ground Zero."

The gravity of the situation with the lack of returns is magnified by the fact that the underperformance has been going on for between ten and 15 years. Calpers, the California Public Employees' Retirement System is a case in point, amid reports that it returned just 0.6% last year compared with its long term target of 7.5%.

With the legal language tightly written on pensions like this across the country, such that states and municipalities won't be able to break free of their obligations, DiMartino Booth thinks the endgame will evoke memories of the Winter of Discontent in London in 1979 and more recently the riots in Athens as key public services are cut.

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iehi-feed-61240 Mon, 05 Dec 2016 22:28:30 GMT Donald Trump insults China with Taiwan phone call and tweets on trade, South China Sea http://implode-explode.com/viewnews/2016-12-05_DonaldTrumpinsultsChinawithTaiwanphonecallandtweetsontradeSouthC.html iehi-feed-61238 Mon, 05 Dec 2016 22:18:22 GMT Trump nominates Carson to lead U.S. housing, urban policy http://implode-explode.com/viewnews/2016-12-05_TrumpnominatesCarsontoleadUShousingurbanpolicy.html If confirmed by the Senate, Carson will be enlisted to serve as Trump's unofficial envoy to African Americans and to lead the charge to repair what Trump has described as America's blighted and dangerous inner cities, a dystopian, racially charged image criticized as frequently at odds with reality. He will also lead Trump's efforts in an arena where Trump and members of his family have been accused of flouting the law in their own business ventures.

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Carson does not have specific experience with the activities of HUD, which manages low-income housing assistance, facilitates financing for homeownership and administers fair-housing programs. But he has a documented position on fair-housing policies that has advocates nervous about what protections a Trump administration might dismantle -- particularly for racial desegregation.

Last year, then-candidate Carson forcefully criticized an Obama administration rule requiring cities and towns to publicly report racial bias in their housing patterns, saying it would "fundamentally change" communities by requiring affordable housing to be built in wealthier neighborhoods.

"These government-engineered attempts to legislate racial equality create consequences that often make matters worse," Carson wrote in the Washington Times. "There are reasonable ways to use housing policy to enhance the opportunities available to lower-income citizens, but based on the history of failed socialist experiments in this country, entrusting the government to get it right can prove downright dangerous."

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iehi-feed-61237 Mon, 05 Dec 2016 15:43:38 GMT Vancouver Housing Tax Pushes Chinese to $1 Million Seattle Homes http://implode-explode.com/viewnews/2016-12-05_VancouverHousingTaxPushesChineseto1MillionSeattleHomes.html Just a few days after Vancouver announced a tax on foreign property investors, Seattle real estate broker Lili Shang received a WeChat message from a wealthy Chinese businessman who wanted to sell a home in Canada and buy in her area.

After a week of showings, he purchased a $1 million property in Bellevue, across Lake Washington from Seattle. He soon returned to buy two more, including a $2.2 million house in Clyde Hill paid for with a single cashier's check.

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Home-purchase inquiries from China have jumped in Seattle and Toronto since the Vancouver tax was announced, according to Juwai.com, the country's largest overseas property website.

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About half of the homes sold in Seattle's suburbs are going to Chinese buyers, with many of the transactions requiring the use of interpreters, international banks and multiple escrow deposits, according to Dean Jones, chief executive officer of Realogics Sotheby's International Realty. That's up from about 30 percent last year, he said.

"This is Vancouver 2.0," said Jones, who lived in the Canadian city about two decades ago, when the capital flow from Asia started to accelerate. "A lot of the same motivations and goals are being replicated in Seattle."

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iehi-feed-61236 Mon, 05 Dec 2016 15:39:09 GMT Money Laundering Explodes to Turn India's Black Money White http://implode-explode.com/viewnews/2016-12-05_MoneyLaunderingExplodestoTurnIndiasBlackMoneyWhite.html As Indians struggle with the chaos caused by last month's sudden banning of their 500 and 1,000 rupee notes, money-laundering networks are spreading across the country, seizing on a new market in helping people turn their cash hoards into legal tender.

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Agents offering to launder money are using creative means, including flying banned cash by the planeload to northeastern states exempt from restrictions as well as connecting people to high-turnover businesses that can deem old cash as revenue, keep a portion of it, and return the rest, according to people involved in the networks. Premiums range from 10 percent to 50 percent, depending on the difficulty, they say. At least one property brokerage is offering to arrange the sale of apartments using banned money in an upscale suburb of Mumbai that's popular with Bollywood movie stars.

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"The whales and sharks will break out of this net easily and find a way to pump their money back into system through organized networks," said C.H. Venkatachalam, general secretary of the All India Bank Employees Association, a union representing 500,000 bank personnel. "It is not easy to cull out the black money from India's economy, and the real big players are tough to touch. "

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There's big risk in transporting currency notes. Apart from theft, income tax authorities or police officers could intercept mass cash transports and impound them. Yet the hawala system, at least, uses trust as a bedrock, and those involved honor their commitments or face repercussions, the lawyer said. The hawala network, a centuries-old system of moving cash around the Muslim world outside formal banking channels, has become active in India only in the past few decades.

People are also taking things into their own hands. They use household staff or people with little money to move their currency notes into bank accounts of multiple people below the 250,000 rupees limit that triggers inquiries from the tax department.

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iehi-feed-61235 Mon, 05 Dec 2016 15:30:06 GMT Greece must reform or leave eurozone, says Germany's Schäuble http://implode-explode.com/viewnews/2016-12-05_GreecemustreformorleaveeurozonesaysGermanysSchuble.html ``"Athens must finally implement the needed reforms," he told the newspaper Bild am Sonntag in an interview published on Sunday. "If Greece wants to stay in the euro, there is no way around it -- in fact completely regardless of the debt level."

Asked if German voters should be prepared for the inevitability of debt relief in the run-up to national elections next year, Schäuble quipped: "That would not help Greece."''

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iehi-feed-61234 Mon, 05 Dec 2016 15:28:53 GMT Trump picks Twitter fight with China http://implode-explode.com/viewnews/2016-12-05_TrumppicksTwitterfightwithChina.html