Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-64949 Tue, 17 Sep 2019 22:48:59 GMT A crack emerges in financial markets: The New York Fed spends $53 billion to rescue the overnight lending market http://implode-explode.com/viewnews/2019-09-17_AcrackemergesinfinancialmarketsTheNewYorkFedspends53billiontores.html Borrowing rates skyrocketed on Tuesday in a corner of the markets the public rarely notices but that is critical to the functioning of the global financial system. The spike in overnight borrowing rates forced the New York Federal Reserve to come to the rescue with a special operation aimed at easing stress in financial markets.

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It was the NY Fed's first such rescue operation in a decade, the last occurring in late 2008.

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On Tuesday morning, the NY Fed launched what's called an "overnight repo operation," during which the central bank attempts to ease pressure in markets by purchasing Treasuries and other securities. The goal is to pump money into the system to keep borrowing costs from creeping above the Fed's target range .

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The episode demonstrates evidence of emerging strains in financial markets and raises concern that the Federal Reserve could be losing its grip on short-term rates.

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The NY Fed announced plans late Tuesday to hold another repurchase agreement operation on Wednesday that would aim to repurchase up to an additional $75 billion.

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The rate on overnight repurchase agreements hit 5% on Monday, according to Refinitiv data. That's up from 2.29% late last week and well above the target range set in July by the Federal Reserve, which is 2% to 2.25%. The surge continued Tuesday, with the overnight rate hitting a high of 10% before the NY Fed stepped in.

Although it doesn't get as much attention as the Dow or the 10-year Treasury rate, this overnight market plays a central role in modern finance. It allows banks to quickly and cheaply borrow money, for short periods of time, often to buy bonds like Treasuries. This market broke down during the 2008 financial crisis.

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"No one knows why this is happening," Jim Bianco CEO of Bianco Research, said on Twitter. "If it persists more than another day or two, it will be a problem."

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iehi-feed-64947 Tue, 17 Sep 2019 14:27:01 GMT WeWork to Delay IPO Amid Suspicion It Is Not Actually a Tech Company Worth $47 Billion http://implode-explode.com/viewnews/2019-09-17_WeWorktoDelayIPOAmidSuspicionItIsNotActuallyaTechCompanyWorth47B.html iehi-feed-64946 Tue, 17 Sep 2019 03:02:12 GMT U.S. charges JPMorgan metals traders over alleged precious metals market manipulation http://implode-explode.com/viewnews/2019-09-16_USchargesJPMorganmetalstradersoverallegedpreciousmetalsmarketman.html The Department of Justice charged two current and one former JPMorgan Chase & Co executives on Monday with alleged racketeering and manipulating prices of metals such as gold, silver, platinum and palladium between 2008 and 2016

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In a statement and in the indictment, prosecutors described how the trio executed "thousands" of unlawful trading sequences that included "layering" deceptive orders at different prices in rapid succession. Prosecutors also described attempts to influence market prices toward specific price points to trigger or avoid triggering options.

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iehi-feed-64945 Tue, 17 Sep 2019 02:59:47 GMT The We Company reportedly will put its public offering on hold http://implode-explode.com/viewnews/2019-09-16_TheWeCompanyreportedlywillputitspublicofferingonhold.html iehi-feed-64942 Mon, 16 Sep 2019 14:03:11 GMT Former Mulholland Group CFO Pleads Guilty to Fraud http://implode-explode.com/viewnews/2019-09-16_FormerMulhollandGroupCFOPleadsGuiltytoFraud.html iehi-feed-64941 Sun, 15 Sep 2019 23:24:23 GMT The Trump Admin's Fannie and Freddie "Reform" Plan is A Cronyism Rehash http://implode-explode.com/viewnews/2019-09-15_TheTrumpAdminsFannieandFreddieReformPlanisACronyismRehash.html It's official: The Trump administration has a plan to deal with mortgage giants Fannie Mae and Freddie Mac -- by returning them to the same quasi-governmental form that set them up for failure in the 2008 financial crisis. If executed, it's likely to be a win for a small coterie of hedge funds, and a big loss for everybody else.

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There are better options. For example, Fannie Mae and Freddie Mac could be merged into a single, fully government-owned corporation that would transfer most of its credit risk to private investors, retaining just the catastrophic risk that only the government can bear. This would get private capital involved without letting it so easily shift risk to taxpayers. Pricing the guarantee correctly would be easier. This in turn would promote more competition from completely private lending channels. As it happens, Fannie Mae and Freddie Mac have already been moving in this direction, issuing special credit-risk-transfer securities and creating a common mortgage-securitization platform.

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iehi-feed-64940 Sun, 15 Sep 2019 12:22:48 GMT Former NYPD Officer Pleads Guilty To Tax Fraud http://implode-explode.com/viewnews/2019-09-15_FormerNYPDOfficerPleadsGuiltyToTaxFraud.html iehi-feed-64937 Fri, 13 Sep 2019 16:14:02 GMT One in Four of New York's New Luxury Apartments Are Unsold As 3-Year Market Downturn Deepens http://implode-explode.com/viewnews/2019-09-13_OneinFourofNewYorksNewLuxuryApartmentsAreUnsoldAs3YearMarketDown.html Among the more than 16,200 condo units across 682 new buildings completed in New York City since 2013, one in four remain unsold, or roughly 4,100 apartments -- most of them in luxury buildings, according to a new analysis by the listing website StreetEasy.

"I think we're being really conservative," said Grant Long, the website's senior economist, noting that the study looked specifically at ground-up new construction that has begun to close contracts. Sales in buildings converted to condos, a relatively small segment, were not counted, because they are harder to reliably track. And there are thousands more units in under-construction buildings that have not begun closings but suffer from the same market dynamics.

Projects have not stalled as they did in the post-recession market of 2008, and new buildings are still on the rise, but there are signs that some developers are nearing a turning point.

Already the prices at several new towers have been reduced, either directly or through concessions like waived common charges and transfer taxes, and some may soon be forced to cut deeper. Tactics from past cycles could also be making a comeback: bulk sales of unsold units to investors, condos converting to rentals en masse, and multimillion-dollar "rent-to-own" options for sprawling apartment... The slowdown is uneven and some projects are faring better than others, but for well-heeled buyers there is no shortage of discounts and sweeteners to be had.

... the city's flagging condo market [...] peaked about three years ago amid a glut of inventory. Now the market could face new obstacles, from growing fears of a recession, to changes in tax law and political instability heading into an election year.

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Moreover, a growing share of condos sold in recent years have been quietly re-listed as rentals by investors who bought them and are reluctant to put them back on the market. Of the 12,133 new condos sold between January 2013 and August 2019, 38 percent have appeared on StreetEasy as rentals.

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The downturn has been hardest on the ultraluxury market, which kickstarted the trend toward bigger and fancier apartments more than six years ago. The super-tall One57 tower, completed in 2014 and considered the forerunner of Billionaires' Row, a once largely commercial corridor around 57th Street in Midtown, remains about 20 percent unsold... "That's mind-blowing," Mr. Miller said, because the building actually began marketing eight years ago, in 2011, and a typical building might sell out in two to three years in a balanced market.

In an analysis of seven luxury towers on and around Billionaires' Row, including pending sales, almost 40 percent of units remain unsold... [the analysis shows] there are over 9,000 unsold new units in Manhattan [including] so-called "shadow inventory," which developers strategically do not list for sale to hold off for a stronger market. At the current pace of sales, it would take nine years to sell them... New development is also performing worse than the resale market. From January to late August, there was a 35 percent drop in the number of contracts signed for new development at or above $4 million, compared to the same period last year...

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iehi-feed-64936 Fri, 13 Sep 2019 15:59:28 GMT WeWork makes sweeping corporate governance changes ahead of IPO http://implode-explode.com/viewnews/2019-09-13_WeWorkmakessweepingcorporategovernancechangesaheadofIPO.html The valuation targets for WeWork continue to drop and the company's IPO valuation could fall below $15, perhaps around $10 billion to $12 billion, sources told CNBC's David Faber. Its private valuation was as high as $47 billion.

The move comes as WeWork's parent company announced Friday that it plans to make a number of changes to its corporate governance structure in advance of its much-anticipated IPO and amid growing investor concerns.

In an amended S-1 filing, the We Co. said it's changing its high-vote stock from 20 votes per share to 10 votes per share, curtailing WeWork CEO Adam Neumann's voting power... The company also eliminated a key provision that would have allowed Neumann's wife, Rebekah, to lead the search for his successor should he ever become permanently disabled or deceased. Instead, WeWork's board would pick a successor. The filing states that "no members of Adam's family will sit on our board."

Neumann has decided to return any profits he receives from the real estate transactions he has entered into with the company, the filing states. He had faced criticism for leasing several properties in which he has an ownership stake back to WeWork and making millions in the process. Neumann will also limit himself to selling no more than 10% of his shareholdings in each of the second and third years after the WeWork IPO.

The startup unicorn free-for-all times are coming to a close...

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iehi-feed-64935 Fri, 13 Sep 2019 15:56:05 GMT Gold tallies a back-to-back gain after ECB unleashes basket of easy-money measures; Fed under pressure http://implode-explode.com/viewnews/2019-09-13_GoldtalliesabacktobackgainafterECBunleashesbasketofeasymoneymeas.html Gold futures marked a second consecutive gain Thursday after the European Central Bank cut eurozone interest rates and delivered a batch of measures intended to boost the region's sluggish economy -- bullish moves for bullion. The ECB cut its deposit rate further into negative territory, decreasing it by 10 basis points to negative 0.5%, while also announcing it would restart its monthly bond-buying program as it attempts to juice inflation and European expansion.

"Gold certainly welcomed the ECB stimulus," said Craig Erlam, a senior market analyst at Oanda. "Ultimately, global easing like we're seeing now has been bullish for gold and that's exactly what we're seeing right now."

December gold on Comex gained $4.20 an ounce, or 0.3%, to settle at $1,507.40 an ounce ... Silver for December delivery, meanwhile, added nearly a penny, or 0.04%, at $18.177 an ounce...

"Central banks around the world have been easing, and will continue to do so, and that's why gold has been making such strides higher with only modest corrections along the way," Erlam said in a market update.

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iehi-feed-64934 Fri, 13 Sep 2019 15:25:57 GMT Trump Is Pushing the U.S. Toward Negative Interest Rates http://implode-explode.com/viewnews/2019-09-13_TrumpIsPushingtheUSTowardNegativeInterestRates.html ... what Trump is saying is, "Boneheads, lower the interest rates down to zero so that we can refinance the United States' debt and feel wealthier. In fact, lower the rate down to negative." So that's his whole purpose first of all. Treasury debt under Trump has grown by around $2.6 trillion already.

You might know that I have an opinion that under every eight-year president in the United States, the national debt doubles. It's been that way roughly back to Reagan. So we'll see if that holds true with Trump. He's well on his way

... the interest rate should compensate you for the risk of loaning to the nation. And now those rewards for loaning money have gone down so low that they've actually gone negative where it's a privilege to loan money to a country.

I'm not so sure that in the long run that holds up. But it is the case right now. And I think the U.S. is going to be the next one to follow.''

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iehi-feed-64933 Fri, 13 Sep 2019 14:54:48 GMT 'Stop the WeWork deal' -- Cramer says embattled IPO could wreck rally http://implode-explode.com/viewnews/2019-09-13_StoptheWeWorkdealCramersaysembattledIPOcouldwreckrally.html CNBC's Jim Cramer said on Friday that WeWork should pull its embattled initial public offering because the negative sentiment around slashing its valuation could be contagious in the overall stock market.

"Stop the WeWork deal," Cramer said on "Squawk Box." "We don't want that deal. I just wish they would go away."

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"I don't want WeWork at any price," Cramer said. "There are certain deals that can come and they can just really take the air out of any market."

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WeWork's plans to move forward despite the reported advice from its major investor SoftBank, which will likely face a multibillion dollar write down if the company debuts at a valuation between $15 billion and $20 billion. SoftBank invested $2 billion in WeWork in January at a valuation of $47 billion. On Friday, CNBC's David Faber was hearing the valuation could be $15 billion or lower.

It's fascinating and telling that Cramer is mostly interested in the effect on the wider market -- the level of anxiety about keeping the market propped up at all costs has reached a fever pitch.

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iehi-feed-64932 Thu, 12 Sep 2019 21:23:12 GMT Ditech Bankruptcy Deal Assures Ditech's Sale http://implode-explode.com/viewnews/2019-09-12_DitechBankruptcyDealAssuresDitechsSale.html iehi-feed-64931 Thu, 12 Sep 2019 15:25:12 GMT From CryptoKitties To Cardi B: Warner Music Joins $11 Million Investment In Ethereum Replacement http://implode-explode.com/viewnews/2019-09-12_FromCryptoKittiesToCardiBWarnerMusicJoins11MillionInvestmentInEt.html Now that Warner Music Group has mastered streaming, generating $2 billion in revenue from the technology, the music giant behind Cardi B, Ed Sheerhan and Bruno Mars has set its sights on blockchain, joining an $11.2 million investment in Dapper Labs, best known for making the viral blockchain game, CryptoKitties.

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So as part of the investment from Andreessen Horowitz, Digital Currency Group, Union Square Ventures, Venrock and others, Bronikowski says Warner Music's blockchain team will work with Dapper Labs to create digital assets using a new public blockchain revealed today, called Flow, that is capable of handling transaction volumes many times more than ethereum, even while expanding on a number of other blockchain projects.

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iehi-feed-64930 Thu, 12 Sep 2019 15:11:53 GMT ECB Blinks; Revives QE and Cuts Rates Deeper Below Zero http://implode-explode.com/viewnews/2019-09-12_ECBBlinksRevivesQEandCutsRatesDeeperBelowZero.html The European Central Bank cut interest rates further below zero and revived bond purchases after President Mario Draghi overcame critics of his stimulus policies to make a final run at reflating the euro-area economy.

The ECB reduced the deposit rate to minus 0.5% from minus 0.4%, and said it'll buy debt from Nov. 1 at a pace of 20 billion euros ($22 billion) a month for as long as necessary to hit its inflation goal.

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The ECB changed its guidance on interest rates to say they'll stay at present or lower levels until the outlook for inflation "robustly" converges to its goal of just below 2%. It previously expected borrowing costs to stay unchanged until mid-2020. It also scrapped a 10-basis point rate premium previously attached to its long-term loan program.

The actions prompted U.S. President Donald Trump to tweet that the ECB is "acting quickly" while the Federal Reserve "sits, and sits, and sits." That's in line with his strategy of calling on the Fed to cut rates aggressively. The Fed is likely to lower borrowing costs next week for the second time this year, as central banks around the world ease to combat the spreading weakness.

Apparently no recessions will be allowed. Astounding.

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iehi-feed-64929 Wed, 11 Sep 2019 14:34:36 GMT WTC First Responders And Ground Zero Workers: We Are Here To Help You! http://implode-explode.com/viewnews/2019-09-11_WTCFirstRespondersAndGroundZeroWorkersWeAreHereToHelpYou.html iehi-feed-64928 Tue, 10 Sep 2019 13:28:05 GMT BB&T Bank Puts $120K In Couple's Account. Police Arrest The Couple http://implode-explode.com/viewnews/2019-09-10_BBTBankPuts120KInCouplesAccountPoliceArrestTheCouple.html iehi-feed-64927 Mon, 09 Sep 2019 16:06:27 GMT New York Real Estate Progeny Marc Menowitz Accused Of Sexual Harassment http://implode-explode.com/viewnews/2019-09-09_NewYorkRealEstateProgenyMarcMenowitzAccusedOfSexualHarassment.html iehi-feed-64926 Sun, 08 Sep 2019 15:25:51 GMT Top 100 Largest Landowners In US Control 40 Million Acres http://implode-explode.com/viewnews/2019-09-08_Top100LargestLandownersInUSControl40MillionAcres.html iehi-feed-64925 Sun, 08 Sep 2019 12:50:38 GMT DEADBEAT TENANT ALERT: Tenant Played Dead To Avoid Paying Rent http://implode-explode.com/viewnews/2019-09-08_DEADBEATTENANTALERTTenantPlayedDeadToAvoidPayingRent.html