Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-60072 Fri, 24 Jun 2016 22:31:40 GMT AEP: Eurocrats Bred Splittist "Terroir-ists", Not Terrorists; Post-Brexit Ground Fraught, But Manageable http://implode-explode.com/viewnews/2016-06-24_AEPEurocratsBredSplittistTerroiristsNotTerroristsPostBrexitGroun.html threatening emanations out of Brussels and from remaining EU members, the case for optimally managing the Brexit doesn't look great... hopefully cooler heads will ultimately prevail...]]> iehi-feed-60071 Fri, 24 Jun 2016 19:59:26 GMT In Brexit victory, a defiant protest against globalization http://implode-explode.com/viewnews/2016-06-24_InBrexitvictoryadefiantprotestagainstglobalization.html "People are waking up to realize that, look, this is potentially a misguided protest vote, but it is a protest vote, and politics is not working for a lot of people," says Brian Klaas, a fellow in comparative politics at the London School of Economics. He says the results will demand greater responsiveness from politicians, so that frustrations do not drive greater nationalism and isolation.

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The immediate shocks are still not known. But German Chancellor Angela Merkel spoke for many when she said, "There is no point beating about the bush: today is a watershed for Europe, it is a watershed for the European unification process."

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or British society, this was much more than a response from the far-right, says Robert Colls, professor of cultural history at De Montfort University in Leicester, who was calling for a "Lexit," or a socialist response to Brexit, ahead of the vote. He says the choice to leave is a "late response to globalization" that has dislocated too many people and not been addressed by the Labour party, the majority of whose members backed the Remain camp.

The referendum itself, and the way it played out amid fear and falsifications, is also indicative of a broken system. "We haven't got a really good system for dealing with complicated matters," he says. "It has not been necessary for either side to say what will happen next. No one has had to spell it out. We just have to frighten each other."

For that reason he says he, like the majority who voted for Brexit, have no idea what to expect now. But they believe that they've actually made the more prudent choice with an EU they say simply does not work.

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iehi-feed-60069 Fri, 24 Jun 2016 16:17:47 GMT Brexit: The System Cannot Hold http://implode-explode.com/viewnews/2016-06-24_BrexitTheSystemCannotHold.html iehi-feed-60065 Fri, 24 Jun 2016 14:47:18 GMT 'Explosive shock' as Britain votes to leave EU, Cameron quits (EU ITSELF NOW TESTED) http://implode-explode.com/viewnews/2016-06-24_ExplosiveshockasBritainvotestoleaveEUCameronquitsEUITSELFNOWTEST.html Britain has voted to leave the European Union, forcing the resignation of Prime Minister David Cameron and dealing the biggest blow since World War Two to the European project of forging greater unity.

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World stocks saw more than $2 trillion wiped off their value, with indices across Europe heading for their sharpest one-day drops ever. Britain's big banks took a $100 billion battering, with Lloyds, Barclays and RBS falling as much as 30 percent at one point.

The United Kingdom itself could now break apart, with the leader of Scotland - where nearly two-thirds of voters wanted to stay in the EU - saying a new referendum on independence from the rest of Britain was "highly likely".

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The EU for its part will be economically and politically damaged, facing the departure of a member with its biggest financial centre, a U.N. Security Council veto, a powerful army and nuclear weapons. The world's biggest trading bloc -- which rose out of the ashes of two world wars, fascist and communist totalitarianism to unite a continent of prosperous democracies -- will lose around a sixth of its economic output.

"It's an explosive shock. At stake is the break up pure and simple of the union," French Prime Minister Manuel Valls said. "Now is the time to invent another Europe."

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iehi-feed-60064 Fri, 24 Jun 2016 04:00:25 GMT 'Leave' scents victory in Britain's EU vote, pound crashes http://implode-explode.com/viewnews/2016-06-23_LeavescentsvictoryinBritainsEUvotepoundcrashes.html Supporters of leaving the European Union seized the lead on Friday in the vote count from Britain's bitterly contested referendum, setting sterling on track for its biggest ever fall on world markets.

The British currency fell as much nine percent to a 30-year-low below $1.35, marking a sharper dive even than on 'Black Wednesday' in 1992 when financier George Soros was instrumental in pushing the pound out of the Exchange Rate Mechanism that predated the euro.

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Bookmakers adjusted their odds to reflect the likelihood of a 'Brexit', with the Betfair Internet betting exchange putting that probability at 94 percent as tallies showed the Leave camp doing better than expected across large swathes of the country.

Such an outcome would shake the European Union to its core, potentially fuelling the rise of anti-EU movements across the continent and marking the start of a two-year divorce process that would create uncertainty for companies and investors.

With results declared from 282 of 382 voting districts plus parts of Northern Ireland, Leave was ahead by 51.6 percent to 48.4 in the referendum.

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iehi-feed-60063 Thu, 23 Jun 2016 22:25:34 GMT IMF warns the US over high poverty http://implode-explode.com/viewnews/2016-06-23_IMFwarnstheUSoverhighpoverty.html iehi-feed-60058 Thu, 23 Jun 2016 15:48:55 GMT The Panama Canal Extension: A Risky Bet http://implode-explode.com/viewnews/2016-06-23_ThePanamaCanalExtensionARiskyBet.html ... when the speeches and the celebrations end, one inescapable fact will remain: The expanded canal's future is cloudy at best, its safety, quality of construction and economic viability in doubt, an investigation by The New York Times has found.

In simple terms, to be successful, the new canal needs enough water, durable concrete and locks big enough to safely accommodate the larger ships. On all three counts, it has failed to meet expectations, according to dozens of interviews with contractors, canal workers, maritime experts and diplomats, as well as a review of public and internal records.

The low winning bid, a billion dollars less than the nearest competitor's, made "a technically complex mega-project" precarious from the outset, according to a confidential analysis commissioned by the consortium's insurer. "There is little room in the budget for execution errors or significant inefficiencies," the analysts, from Hill International, wrote in 2010, adding, "This is a high-risk situation."

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Last summer, water began gushing through concrete that was supposed to last 100 years but could not make it to the first ship. The Hill analysts had warned that the consortium's budget for concrete was 71 percent smaller than that of the next lowest bidder. The budget also allotted roughly 25 percent less for steel to reinforce that concrete.

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At the same time, the canal's success may be undercut by external forces: chiefly the slowdown in global trade, especially from China.

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A trouble-free canal would cast a favorable light on a country embarrassed by government scandal and by the Panama Papers, which brought a local law firm international ignominy for setting up secret offshore accounts for wealthy customers from around the world.

Even residents who privately criticize canal management are reluctant to speak up for fear of appearing unpatriotic.

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The financially weakest consortium was led by a Spanish company, Sacyr Vallehermoso, which American officials called "nearly bankrupt" in one cable and "technically bankrupt" in another...

In March 2009, after 15 months of contentious negotiations, the three consortiums submitted their sealed bids before a packed auditorium, with the president and diplomatic corps as witnesses. To heighten the drama, a motorcade delivered the envelopes to a vault at the National Bank for safekeeping. The one with the best price and design would win. That July, with the nation watching on television, the bids were opened, and the result was a shocker: The underdog Sacyr group had won.

Bechtel and American diplomats were incredulous. Sacyr could not even "pour the concrete" for that amount, a Bechtel representative told the embassy, according to a diplomatic cable.

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iehi-feed-60057 Thu, 23 Jun 2016 15:39:42 GMT Some mortgage servicers break U.S. rules, mostly due to technology: CFPB http://implode-explode.com/viewnews/2016-06-23_SomemortgageservicersbreakUSrulesmostlyduetotechnologyCFPB.html Some mortgage servicers are failing to follow federal rules intended to help struggling borrowers avoid foreclosure, often because they use faulty technology, the U.S. agency charged with protecting consumers' finances said on Wednesday.

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"Mortgage servicers can't hide behind their bad computer systems or outdated technology. There are no excuses for not following federal rules," said CFPB Director Richard Cordray in a statement.

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According to Wednesday's report, examiners for the CFPB, found misrepresentations of terms, fees and deadlines for loans and modifications in recent communications from servicers. The CFBP said loss mitigation and transfers were the primary problem areas, and that servicers "continue to use failed technology that has already harmed consumers."

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iehi-feed-60056 Thu, 23 Jun 2016 15:38:18 GMT Homeownership slumps, remains elusive for many Americans, study finds http://implode-explode.com/viewnews/2016-06-23_HomeownershipslumpsremainselusiveformanyAmericansstudyfinds.html Homeowners who lost their homes to foreclosure are still struggling to clear their credit records so they can buy another home. Meanwhile, some big banks have moved away from offering subprime and government-backed loans and have significantly tightened credit requirements despite low mortgage rates, making it that much harder for some potential homebuyers to get their foot in the door. "How much house can I afford?" is no longer the main question potential homebuyers need to consider; it's "How will I afford it?"

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Although mortgage rates have remained well under 4% this year, it's not enough to drive homebuying to the levels that industry analysts had predicted. A shortage in inventory, tightened lending requirements and slow income growth are keeping many potential homebuyers on the sidelines, Zigas says, adding that high levels of student debt and a challenging job market for young people are dragging on demand for homes.

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iehi-feed-60055 Thu, 23 Jun 2016 01:10:38 GMT Nervy global investors revisit 1930s playbook (AMIDST MOUNTING SLOWDOWN EVIDENCE) http://implode-explode.com/viewnews/2016-06-22_Nervyglobalinvestorsrevisit1930splaybookAMIDSTMOUNTINGSLOWDOWNEV.html Global investors are once again dusting off studies of the 1930s as fears of protectionism, nationalism and a retreat of globalization, sharpened by this week's Brexit referendum, escalate anew... Broader worries about global trade, frail growth and dwindling investment returns have festered since the banking shock of 2007/08 and have mounted this year.

Stalling trade growth has already led the world economy to the brink of recession for the second time in a decade, with growth now hovering just above the 2.0-2.5 percent level most economists say is needed to keep per capita world output stable. Three-month averages for growth of world trade volumes through March this year have turned negative compared with the prior three months, according to the Dutch government statistics body widely cited as the arbiter of global trade data. And it's not a seasonal blip...

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iehi-feed-60051 Thu, 23 Jun 2016 00:55:01 GMT Increase in migrants reaching Aegean islands fuels concern http://implode-explode.com/viewnews/2016-06-22_IncreaseinmigrantsreachingAegeanislandsfuelsconcern.html The influx of would-be migrants into Greece from neighboring Turkey is decisively on the increase following several months during which the flow had been staunched thanks to a European Union deal with Ankara to crack down on people smuggling.

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In an apparent bid to curb the number of rulings upholding appeals, the government passed a legislative amendment last week which removes the representative of the Hellenic League for Human Rights from the appeal committees, which feature two judges and a representative of the United Nations refugee agency.

The HLHR rapped the government for changing the composition of the committees instead of applying pressure to ensure that Turkey becomes a safe country to make migrant returns viable.

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iehi-feed-60050 Thu, 23 Jun 2016 00:51:46 GMT Some 66 million Americans have ‘zero' emergency savings http://implode-explode.com/viewnews/2016-06-22_Some66millionAmericanshavezeroemergencysavings.html ``Around 28% of U.S. adults have saved "zero dollars" for an emergency, according to a survey released Tuesday of 1,000 U.S. adults by personal savings website Bankrate.com carried out by Princeton Survey Research Associates International, a polling firm. When extrapolated for the entire 234.6 million U.S. adult population, that's equivalent to 66 million people. That's down from 29% last year, but up from 24% in five years ago. Another 28% of adults have saved enough money to last six months, up from 22% from last year and a six-year high; 18% had some emergency savings, but not enough for six months. Generation Xers are in the worst position of all generations: 33% of 36- to 51-year-olds haven't saved anything for an emergency.''

So in other words, those doing reasonably OK since the global financial crisis have managed to do a little more OK, while the rest are doing pretty much worse than ever.

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iehi-feed-60048 Thu, 23 Jun 2016 00:48:33 GMT In Amsterdam, the Housing Market Is Showing Signs of Overheating http://implode-explode.com/viewnews/2016-06-22_InAmsterdamtheHousingMarketIsShowingSignsofOverheating.html The Netherlands, the nation of tulipmania almost 400 years ago, saw prices in its capital city surge almost 21 percent in the first quarter. While the blame partly falls on a simple supply-and-demand imbalance, the signs are pointing to a potential squeeze...

In a market where almost half of properties are owned by non-profit corporations, mainly for social housing, there's just not enough coming on to the market to satisfy buyers. After falling about 14 percent in five years, prices have rebounded recently and are now above pre-crisis levels.

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Another reason prices continue to skyrocket is that the Netherlands is relatively unique in still allowing buyers to borrow more than the value of the house -- no down payment necessary. That means as prices rise, buyers have less of a barrier to entry than in other markets, like London, where the size of a cash down payment is increasingly pushing first-time buyers out of the market.

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iehi-feed-60046 Tue, 21 Jun 2016 23:22:43 GMT Yellen Leads Fed in Retreat as Reasons for Rate Hikes Fade http://implode-explode.com/viewnews/2016-06-21_YellenLeadsFedinRetreatasReasonsforRateHikesFade.html Fed Chair Janet Yellen sketched a cautious and uncertain view of the economy in testimony before lawmakers in Washington Tuesday. After her remarks, Tannenbaum was among several economists who said they believe Yellen is among the six Fed officials who last week predicted just one rate increase this year. And that others on the Federal Open Market Committee may soon follow her lead.

If the chair was one of the officials who forecast a single rate increase, that would mean she stepped below the median forecast of the 17 participants published June 15, which was for two hikes. That would be unusual because Fed chairs typically lead from the center of the committee. They can't do that if they are outliers, said Laurence Meyer, a former Fed governor who now runs a policy analysis firm in Washington that bears his name.

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The case for a strong consumer took a blow, however, when the Labor Department reported that employers in May created a disappointing 38,000 new jobs -- fewer than in any month since September 2010.

"It seems pretty clear the Fed's confidence was pretty badly shaken by those recent numbers," said Ward McCarthy, chief financial economist at Jefferies LLC in New York, who also pegged Yellen as likely favoring one hike this year.

"The latest readings on the labor market and the weak pace of investment illustrate one downside risk -- that domestic demand might falter," Yellen said Tuesday.

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iehi-feed-60045 Tue, 21 Jun 2016 23:18:11 GMT Mixed Bag: US Health Care Spending Rise Comes in Below Projections As ACA Medicare Cost-Savings Work, While Private Insurers Ream Their Customers http://implode-explode.com/viewnews/2016-06-21_MixedBagUSHealthCareSpendingRiseComesinBelowProjectionsAsACAMedi.html The authors of the report make it clear that while the Affordable Care Act may have played some role, it is far from the main contributor... A bit of this has to do with lower-than-expected health insurance enrollment. Medicaid, for example, has millions fewer enrollees than CBO initially expected -- a product of the Supreme Court making the program's expansion optional in 2011.

But this isn't the case everywhere: Medicare, for example, is expected to have 700,000 additional enrollees in 2019 for $96 billion less... This has everything to do with the fact that per-person costs of health care are dropping. Forecasters now expect Medicare to spend $12,527 per person in 2019 -- significantly less than their estimate of $13,990 in 2010.

... The health care law significantly reduced certain Medicare payments. It also created dozens of new programs that pay hospitals based on the quality of care they provide, not just the quantity... Hospital readmissions, for example, have fallen sharply since Medicare began penalizing providers for those unnecessary repeat visits.

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But for individual consumers, slower health spending likely doesn't feel cheaper at all. In fact, it probably feels more expensive: One big way private insurers have held down costs is by asking consumers to pay a larger and larger chunk of their medical bills.

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iehi-feed-60040 Tue, 21 Jun 2016 16:20:42 GMT Raymond James: Get Ready for $80 Oil http://implode-explode.com/viewnews/2016-06-21_RaymondJamesGetReadyfor80Oil.html iehi-feed-60039 Mon, 20 Jun 2016 17:12:46 GMT Suntrust Concedes $200K Principal Write Down To MFI-Miami Client http://implode-explode.com/viewnews/2016-06-20_SuntrustConcedes200KPrincipalWriteDownToMFIMiamiClient.html iehi-feed-60036 Mon, 20 Jun 2016 14:21:38 GMT Blow for Italy's PM as 5-Star makes breakthrough in regional, mayoral votes http://implode-explode.com/viewnews/2016-06-20_BlowforItalysPMas5Starmakesbreakthroughinregionalmayoralvotes.html The anti-establishment 5-Star Movement trounced Italian Prime Minister Matteo Renzi in local elections this weekend, clouding his chances of completing a five-year term and winning a referendum he has called on constitutional reform.

Five-Star, which feeds off popular anger over widespread graft, won in 19 of the 20 towns or cities where it had advanced to the run-offs, including Turin and Rome, where Virginia Raggi, a 37-year-old lawyer, became the first woman mayor.

The party has so far controlled just a handful of medium-sized towns. Success in Rome and Turin could prove a springboard to victory in national elections due in 2018.

Protest parties have made inroads in a number of European countries in recent years and 5-Star's advances in Italy this weekend mean a major European Union capital will be governed by a party which wants Italy to drop the euro.

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iehi-feed-60035 Mon, 20 Jun 2016 14:18:38 GMT The Economy Is Not What It Seems - Lance Roberts http://implode-explode.com/viewnews/2016-06-20_TheEconomyIsNotWhatItSeemsLanceRoberts.html iehi-feed-60033 Sun, 19 Jun 2016 19:58:39 GMT China Now Stockpiling Massive Amounts Of Silver, Swiftly Building Massive Regional Trade Infrastructure http://implode-explode.com/viewnews/2016-06-19_ChinaNowStockpilingMassiveAmountsOfSilverSwiftlyBuildingMassiveR.html Between August, 2015 and April, the latest data I have, silver inventories in China (on their exchange) have climbed more than sevenfold from 233 metric tonnes to a staggering 1700 tonnes. China is stockpiling silver specifically for use in their enormous solar buildout program, which is a massive, multi-year program that will require unimaginable amounts of physical silver.

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China's end game is to secure enough resources to secure a decent lifestyle for its nearly 1.5 billion citizens. China realizes this means that its Eastern trading partners must also develop. In a report authored by McKinsey Global Institute that was released this week, the consultant reports that over the most recent decade for which it has data, China has spent more on infrastructure than North America and Western Europe combined. Moreover, the remaining parts of the East led in large part by Chinese financing have spent three times more than China.

This piece makes the good point (as have a few scattered others in the last few years) that China's stockpiling of and encouragement of private citizen-buying of precious metals is quite compatible with China's extensive efforts to build out regional trade infrastructure (most notably, the "New Silk Road" and One Belt/One Road initiative). I.e., the plan seems to be (1) build up both private and public monetary wealth, (2) build out regional trade infrastructure, (3) when the regional trade infrastructure is mature, unleash the hoarded wealth to pivot to a consumer-dominant local economy, as buyer through the newly-created regional trade infrastructure. Put another way, the solution to the mystery of the "missing transition to a Chinese consumer-driven economy" may simply be that it is waiting upon the maturation of the regional trade infrastructure -- the plan is not, at all, to buy through the "old" (currently dominant) trade networks with the West.

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